The worst of the commercial property downturn may be over, as increasing appetite from private investors may signal a return to the boom of yester years.
Commercial property has taken the full force of the recession’s blows, with prices falling by more than 40% since June 2007. But further research has shown that the free fall may finally be over.
More than half of the banks surveyed by investment experts, Hotbed.uk.com, planned to increase their commercial property allocation in the coming year, with three quarters of those banks also believing 2010 will be a good year for investment in commercial property, up from the 33% of 2008.
Property data supplier, Investment Property Databank, have revealed the first promising figures to hit the commercial market since the gloom of 2007. UK commercial property values are poised to “go positive” for the first time in almost 25months, coupled with more stabilising rents.
Increased investment in commercial property by foreign parties, such as Chinese involvement in Canary Wharf and South Korean interest in several key areas throughout the nation’s capital, have also altered the market during weak times for the pound.
But there are still warning signs ahead for commercial owners. Clouds hanging over unemployment and credit availability are still shadowing the commercial sector, and with the rental market predicted to fall by 20.5% this year, celebrations are being put on hold for a few months yet.
For assistance in commercial property matters please contract Chris Dixon at kenneth elliott + rowe solicitors.