* Survey sees values -21.6 pct in '09, -4.9 pct in '10
* Capital values forecast to rise 3.1 percent in 2011
* Likely further cuts in forecast due to uncertainty
By Daryl Loo
LONDON, May 29 (Reuters) - More pain is in store for UK commercial property investors after fund managers and analysts further cut predictions for the sector, and tempered their hopes of a recovery in 2011, consensus data showed on Friday.
Experts predict property values and rental rates will worsen in all real estate sectors -- office, industrial, retail -- adding to concerns about the ability of property owners to service billions of pounds in bank loans.
In its quarterly survey, the Investment Property Forum said property experts expect average capital values to fall 21.6 percent in 2009, worse than a 17.9 percent drop they predicted in March, induced by gloom in the broader British economy.
"It is difficult to find anything but bad news in both the economic overview and the forecasts this quarter. The market is clearly responding to the recessionary conditions," said IPF, which surveyed 28 fund managers, advisors and equity analysts.
"Uncertainty within the 2009 forecasts is all on the downside suggesting that these numbers are more likely to fall further than to rise," it added.
The experts predict capital values will fall another 4.9 percent next year, and while they still expect the market to recover in 2011, have cut their forecast to a 3.1 percent rise in value, from 4.1 percent previously.
Benchmark data from Investment Property Databank showed commercial property values in the UK have on average sunk by 42.7 percent since the market peaked in June 2007.
The survey, funded by top UK property companies including Land Securities, British Land and Hammerson, showed the worst revisions in London's prime City and West End office districts, where rents are predicted to fall as much as 26.5 percent this year. (Reporting by Daryl Loo; Editing by Rupert Winchester) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters)