Unfortunately for investors, commercial property returns have nose-dived since the credit crunch took hold. From returns of 15 per cent and more during 2005 and 2006 they plunged into negative territory last year.

Values have been further depresssed by forced sales by open-ended property funds, mainly UK domiciled. They are selling property assets to raise cash to pay out investors who want to exit. In some cases they have even suspended redemptions.

Many Channel Islands property funds are closed-ended with shares that are quoted on major stock exchanges. They are less vulnerable to forced sales than their open-ended counterparts, as investors can exit by selling their shares.

However, the fall in commercial property values has increased the burden of their borrowings relative to the value of their property portfolios. One example is the £430 million, Jersey-domiciled Invesco Property Income Trust (IPIT) which invests in commercial property in the UK and Europe.

The trust's borrowings now exceed 65 per cent loan to value, so the trust announced last month that it plans to sell property in order to bring borrowings within this limit.

Other highly borrowed offshore investment trusts specialising in property are feared to be in a similar situation, as property values slump compared with bank borrowings. Shareholders may find these trusts follow Invesco's example and sell property to cut borrowings, further reducing returns.

More than £13 billion worth of closed ended property funds are Guernsey-domiciled and the Guernsey Financial Services Commission is "monitoring the situation in the light of the current credit crisis" according to Peter Neville, the commission's director general.