French commercial real estate saw a recovery in capital values last year, recording 4.0% growth, according to the IPD France Annual Property Index. The rebound in values led to a total return of 10%.

The increase follows a cumulative decline in values over 2008 and 2009 of -12.7%, and while the recovering returns in 2010 remain below the levels seen before the downturn in 2008, annualised total return over a three-year period was positive, at 2.4%.

Income return saw a decline in 2010 of 30 basis points, partly offset by capital growth, while rental values continued to decline, at -0.3%, a shallower rate than 2009’s -0.8%. Yield compression of 40 basis points, to 5.9%, helped to drive capital growth.