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Business property market 'may not recover to pre-recession levels for years'
The UK commercial property market may take a number of years to return to the state it was in before the recession hit.
A prediction that this may be the case for another 15 years is "certainly plausible", an expert has said.
Kelvin Davidson, property economist at Capital Economics, said it is important to note the difference between real and nominal values.
His comments follow forecasts from BNP Paribas that business property values could have to wait until 2025 to reach the same levels as in 2006-07.
Rents may also stay low generally, but City of London returns are an exception and there is expected to be more demand than supply, the bank observed.
It based its calculations on the previous recession, after which it took 13 years for property values to reach their pre-crash levels.
Mr Davidson added values are now around 30 to 35% lower than they were in 2007.
Posted by Tom Baker
A prediction that this may be the case for another 15 years is "certainly plausible", an expert has said.
Kelvin Davidson, property economist at Capital Economics, said it is important to note the difference between real and nominal values.
His comments follow forecasts from BNP Paribas that business property values could have to wait until 2025 to reach the same levels as in 2006-07.
Rents may also stay low generally, but City of London returns are an exception and there is expected to be more demand than supply, the bank observed.
It based its calculations on the previous recession, after which it took 13 years for property values to reach their pre-crash levels.
Mr Davidson added values are now around 30 to 35% lower than they were in 2007.
Posted by Tom Baker
Wed, 14th Jul 2010