Prime CBD office towers could potentially drop in value by between 10 per cent to 20 per cent as commercial property assets are eventually marked down to a market drastically reconfigured by higher interest rates.

Long-heralded, the reckoning for commercial property values, especially CBD office blocks, could play out within months. As values fall, gearing levels automatically rise, putting pressure on banking covenants. Superannuation funds will also face more pressure for more transparent reporting of the marked-to-market value of their illiquid assets. AFR Weekend revealed that super giant REST pulled a property from sale after receiving bids 15 per cent below book value.