(1888PressRelease)
February 01, 2008 - Recent surveys suggest that the four-year boom in London commercial property is at an end and that investors may be backing off from this sector. According to consultancy firm CB Richard Ellis, commercial property values fell 4.3% in December, and 11.9% since the start of the credit crunch.
Figures from the Royal Institution of Chartered Surveyors (RICS) show that renter demand has fallen at its fastest pace since early 2003, a trend which may worsen if 20,000 jobs in London’s financial district are cut this year, a scenario predicted by leading economic forecaster Experian.
Experian foresees up to a 5% fall in net employment in the City and Canary Wharf this year. According to financial services firm JPMorgan Chase, this could lead to a 10% drop in rents.
The mood among buyers has responded to these indicators, which resulted in a 75% fall in the volume of transactions in the last quarter of 2007 over the previous year. It is anticipated that both rent and property prices in the commercial property sector will show negative returns this year.
Adding to the poor outlook is the amount of new supply on the market, which, according to CBRE, amounted to an additional 3.4 million sq ft, or 70% more than the annual average.
The drop in tenancy numbers at the same time as a surplus of new space may well keep investors away from commerical property until the sector shows more positive signs. However, the sharp decline in values, particularly in the last part of 2007, may suggest that “the initial projections of a large adjustment in 2008 may not be as severe as previously thought”, as Michael Brodtman of CBRE observed, and that “it may not be long before more investors see value in the sector.”
For press enquiries, please contact Phil Rendall on 020 7099 9026
Email: phil ( @ ) dhbuyers dot co dot uk
Web: www.decisionhomebuyers.co.uk
News provided by Decision Homebuyers, a leading UK property company providing a quick and simple solution for selling your home, no matter what the condition.
Decision Homebuyers carries out daily surveys of the national media to provide up-to-date news and commentary on the UK property market.
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