Ireland and the UK had the worst global commercial property returns in 2008 and the current state of the US commercial market was highlighted on Tuesday, when Boston’s John Hancock Tower, New England’s tallest skyscraper, was sold at auction, at a 50% plunge in its purchase price, compared with less than 3 years ago.
The London-based IPD Index, said in Johannesburg on Tuesday, that South Africa's nominal returns of 13.0% on commercial property in 2008, were sharply down on the 27.5% recorded in 2007, and the lowest in six years. This performance is nevertheless the highest in the IPD indices for all countries published to date and contrasts with the pattern seen across Europe, particularly in the UK and Ireland, where capital values plummeted last year due to yield rises across all sectors. The nominal total returns for the UK and Ireland in 2008 were -22.1%, and -34.2%, respectively. In Continental Europe, the spread of performance so far ranges from -4.7% in Norway to 5.1% in Finland. In Asia Pacific, South Korea – which returned 26.7% last year – came in at 4.0%, while Australia recorded 1.8% and, in North America, Canada produced 3.7%.
On Tuesday, Boston’s John Hancock Tower, New England’s tallest skyscraper, was sold at auction for $661 million, about half its price less than three years ago.
The purchasers bid $20.1 million for control of the 60-story building and agreed to assume the $640.5 million mortgage. In 2006, Broadway Partners and its founder Scott Lawlor, paid $1.3 billion for the property and defaulted on short-term loans secured by the Hancock Tower and other assets last January.
The building is named after John Hancock, the first governor of the Commonwealth of Massachusetts, and one of America's Founding Fathers. His signature on the 1776 Declaration of Independence document is the most prominent, because of its size.
