Commercial property has had a torrid time since the Brexit vote on 23 June last year. It was one of the first sectors affected and one of the hardest hit. Share prices fell the day after the referendum, as investors anticipated that the UK's departure from the EU would lead to an exodus of tenants.
Contagion quickly spread to property funds as investors tried to withdraw their money from the sector. Some funds quickly adjusted their pricing. Most open-ended retail funds were obliged to halt trading to stem the tide of withdrawals.
It was, it seemed, the financial crisis all over again, with some £3 billion of funds withdrawn by investors according to the Investment Association. The IPD Monthly Property index recorded three straight months of decline after the referendum, the first quarterly decline since June 2009.
HARD HIT AFTER BREXIT VOTE
Hélène Demay, vice-president at IPD's parent MSCI, said: 'The negative quarterly total return does not come as a surprise, as external shocks are often followed by a market adjustment. What will be much more interesting to see is how the market behaves across the next few quarters.'
In November came the first signs that commercial property may have turned the corner. The CBRE Monthly index, which like the IPD had been dropping, showed its first modest rebound of 0.1 per cent for the month of October.
Perhaps more importantly, most property funds that had suspended dealing reopened their doors.
M&G, Standard Life, Henderson and Columbia Threadneedle were among those to reopen their property funds, while Aviva said withdrawals from its £1.5 billion Property Trust would resume in 2017.
So where does that leave commercial property as a prospect for investors? First, there's a fairly widespread view that the tide had turned before the referendum.
Second, it is generally accepted that the exodus from property funds and the consequent halt in redemptions was driven by sentiment and was not justified by circumstances.
'I suspect most of those who sold didn't want to, but as in a bank run, they panicked because others were doing so,' says Mark Dampier, head of research at Hargreaves Lansdown.
FUNDS IN RECOVERY
The performance of property funds since the referendum has not been disastrous in any case. By mid-November, several key UK funds were showing minor losses over one year and six months but were in positive territory over three months.
The outlook in 2017, particularly once the UK triggers Article 50, depends on the view you take about the likely impact on the UK economy. Jason Hollands at Tilney Bestinvest argues that the period of maximum uncertainty has already passed.
He says: 'Brexit undoubtedly poses headwinds for parts of the commercial property market. The area facing the greatest challenge is arguably the City of London office market.'
But he adds: 'Parts of the market appear to be beneficiaries from the most visible impact of the Brexit vote so far, weaker sterling - making the UK a more attractive destination for shopping and tourism, and benefiting UK exporters.'
The main reason for investing in commercial property remains the same: for a steady and reliable flow of income.
Dampier is not a fan of open-ended funds, not least because charges wipe out much of the 3 to 5 per cent yield. However, if you already own a fund, it may be worth staying invested for the long term.
HOW TO BUY COMMERCIAL PROPERTY
For exposure to property in a passive or tracker fund, there are a couple of options.
The iShares UK Property Ucits ETF is an electronically traded fund managed by BlackRock that has holdings in all the main real estate investment trusts quoted on the London Stock Exchange. Over the year to 1 December 2016 it lost 16.6 per cent.
From the same stable, the iShares MSCI Target UK Real Estate Ucits ETF aims to provide a risk and return ratio similar to physical real estate. The return is concomitantly better over 12 months, at -9.9 per cent.
If you're looking for exposure to European property, iShares Europe Developed Real Estate ETF invests in property companies across the continent. It showed a 12-month loss of 12.6 per cent as of 1 December.