After a number of years of stellar performance, by any standards, the U.K. commercial real estate market fell sharply in the second half of 2007 and capital values have continued downward throughout this year. Having been in the vanguard of a global, investor-led, real estate cycle, the decline in the U.K. market appears to be similarly ahead of a global retrenchment of real estate markets around the world.

Today finds the U.S. commercial real estate market in distress; European markets are seeing prices beginning to fall quite rapidly; and even in the less debt-dependent and higher-growth-oriented Asian markets, investor pressures are now waning and prices are beginning to fall back.

Given such a background, it seems appropriate to halt for a moment and consider how the U.K. pension fund community currently perceives commercial real estate as an investment asset, both in the United Kingdom and overseas. It is worthwhile, to