The protracted turnaround of the United Kingdom's commercialproperty market was given an adrenaline shot in the form of aninflux of foreign capital to London. While this is good in theshort term for the UK, the rest of the country languishes andcontinues to feel downward pressure on its values. With all eyes,and capital, fixed on the UK's dominant metropolis, themuch-anticipated distressed asset market has yet to trulymaterialize.

According to DTZ's "Global Occupancy Costs: Office 2010" report,London's West End regained its mantle in the first quarter as themost expensive location in the world to occupy office space. Retailis also thriving in this area, thanks to an influx of Europeantourists drawn by the advantageous euro-to-pound exchange rate.Although this rise in value is good for the UK in general, itcreates a larger looming issue for those secondary marketproperties.

"There is a polarization between primary and secondary markets,' explains Rupert Dodson, head of valuation for Cushman &Wakefield in London: "Outside of London, there is great concernabout rental growth. Plus, the drivers of employment, job growthand consumer spending still look pretty poor." He says that theprimary factor, as in many of the US markets, is that investors arerisk averse.