The coronavirus is hurting Australia's commercial property prices and that's a problem for most of us

They account for 8 per cent of the assets of Australian super funds.

If their values drop (and they are falling) it will affect all of us, especially those about to retire or already retired.

Until COVID-19, commercial properties were widely regarded as safe investments. They offered both reliable income streams and capital gains as population growth increased the value of scarce real estate.

With the return on government bonds falling below 1 per cent they ought to be becoming more attractive, but offices are empty, their future uncertain, high end shopping centres are receiving less traffic, and hotels have entire floors unused.

In July the number of mobile phones active in Sydney’s central business district was down 52 per cent on January and February. In Melbourne’s CBD, before the stage 4 lockdown, mobile phone traffic was down 65 per cent.

Data centres are among the few commercial property bright spots – we are moving more data – along with distribution centres and regional shopping centres – we are shopping online and closer to home.

Over the course of the year the values of commercial property trusts listed on the Australian Securities Exchange have slid 29 per cent, 32 per cent, 34 per cent, 48 per cent, 52 per cent, and 69 per cent.

For super funds with 8 per cent of their assets in commercial property, a decline of 25 per cent in values knocks 2 per cent off their assets — $54 billion across the industry as a whole.

In the only other big downturn since the advent of Australia’s superannuation system, the global financial crisis, commercial property offered the funds stability while shares were volatile.

Not so this time. The value of the commercial property is diving along with the stock market with just as uncertain a future.

Theodore Connell-Variy, Lecturer, School of Property, RMIT University and Tony McGough, Senior Lecturer, Property, RMIT University