UK comm. property recovery at risk -Aviva, HSBC

* Aviva Investors to be net-buyer of UK property in 2010

* Sees risk recovery stalling end-2010

* HSBC GAM warns against over-optimism on UK rents

By Daryl Loo

LONDON, Nov 4 (Reuters) - Britain's commercial property market recovery could be short-lived, if yield-chasing investors bid up prices without a corresponding improvement in the economy, two major property investors said on Wednesday.

In the third quarter, unlisted UK property funds raised the most cash from investors in two years, a report showed this week, as values rebounded in August after falling 45 percent from their mid-2007 peak. [ID:nL335486] "There is significant scope for yields to rally from here," Aviva Investors head of real estate investment strategy David Skinner told Reuters on the sidelines of an industry conference.

"But clearly if it happens too quickly with no recovery in the underlying income stream, there is a risk the recovery in capital values that is underway stalls towards the next year and into 2011," he said.

Aviva Investors (AV.L: Quote, Profile, Research), the asset management arm of the UK's second-largest insurer, sees rentals in the UK falling 15 percent between now and mid 2011, taking the total drop to about 25 percent as a weak economic recovery stifles occupier demand.