The U.K. commercial property sector has become a "toxic environment" for investors, according to Plurimi Wealth's chief investment officer. Patrick Armstrong told CNBC's Pro Talks that the real estate sector was "sensitive" to higher interest rates, which he thinks will lead to lower property values and share prices. Armstrong also revealed that he was betting against British Land and Land Securities , two of the largest property development and investment companies in the United Kingdom, by short-selling their shares. Short-sellers profit when stocks fall. They borrow shares to sell them immediately with a plan to repurchase them when the price is lower to pocket the difference. "We're in a recession already in the United Kingdom. There's more office supply than there is demand, and work from home has removed some of the demand for office space," Armstrong said, who oversees more than $6 billion in assets. "I do think commercial property in the United Kingdom is in the most toxic environment you can imagine, which is higher rates, lower property values, and no prospect for rental growth." Shares of British Land and Land Securities have fallen by 23.1% and 18.5% this year, respectively. In comparison, the FTSE 100 index, of which the two companies are constituents, has risen by 4.65% in the same period. In contrast to Armstrong, equity analysts at UBS have a buy rating on both stocks. In addition, the price target from the investment bank for shares in British Land and Land Securities offers an upside potential of 17.6% and 9.2%, respectively. Neither company immediately responded to requests for comment from CNBC. Real-estate valuations, especially commercial property, move inverse to their yields. Typically, such investments command a premium above the risk-free returns of government bonds. With U.K. government bonds offering a yield of about 3%, commercial property valuations have fallen to compensate for a rise in yields above sovereign gilts. British Land now offers a yield of 7.1%, a full percentage point above its long-term average, according to UBS. The investment bank suggests that with every 0.5 to 1 percentage point rise in yield, values fall by 15-20%. The bearish sentiment is also echoed by economists at Capital Economics. But they expect the drop in values to be much less this time compared to the decline during the global financial crisis of 2007-2009. "We estimate peak-to-trough drops of 10-15% in both the U.K. and the euro-zone over the next year or so," said Andrew Burrell, chief property economist at Capital Economics, in a note to clients earlier this month. However, Burrell thinks property prices in Europe will underperform, owing to a relatively worse recession on the continent than in the United States. "In Europe, by contrast, the contraction is deeper, with output falling 2% peak to trough," Burrell said, referring to the expected decline in GDP. "We also expect that the monetary easing will come later than in the U.S., delaying the recovery in economic growth and real estate values."