Commercial property returns fell in the third quarter for the first time since 1994, according to the Property Council IPD index.
Returns fell 0.3% while capital values fell just over 2%.
However, the annual return still stands at 10.7% thanks to previous quarters of strong growth.
The figures are based on the analysis of 281 properties, with a total value in excess of $6.9 billion.
Research company IPD said the real estate sector is reacting to uncertainty over future economic growth, a global recession and the collapse of equity markets.
IPD says further declines in property values are expected as valuers find it difficult to determine the value of buildings due to the lack of transactions taking place.