The commercial property investment market has reached fever pitch according to research from Cluttons.

But investors can find nothing to buy and yields are now tumbling.

According to Cluttons' quarterly property market update: "This is fantastic for property now, especially in terms of its perception in the eyes of fund managers and asset allocators.

"However, investors and private buyers in particular need to be mindful of not paying over the odds just to get into an asset class currently perceived as a better bet than equities."

The commercial property investment market has changed dramatically over the past few months with investors desperate to find a product to buy.

The weak performance of UK equities and the renewed perception shares are unlikely to deliver significant capital growth to supplement their low dividend yield, has led to an even greater surge of investors seeking property.

Few investors are willing to sell property.

This combination has already forced property yields down in many sectors, with further falls also possible.

As a result, commercial property total returns could exceed ten per cent this year.

Cluttons' head of research Neil Chegwidden said: "Our central forecast is that commercial property returns ten per cent this year.

"But our forecast for this year carries a little more risk than in recent years.

"Property investment fever has taken a quick and firm grip.

"Yields could fall further, spread to all sectors and hence drive total returns over ten per cent.

"Conversely, a slight pick-up in the equity market, higher interest rates and a re-iterating of weak occupier markets could provide a cold bath for fever-ravaged yields."

Mr Chegwidden warned the investor frenzy could end in tears for some - especially some private investors.

Owning property would not solve the pension shortfall if it was bought at a price more likely to invoke capital value falls than gains, especially when rental growth was as low as is and is forecast to be.

For further information, contact Linda Welch or Jackie Whitaker on 020 7487 9191.