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Commercial Property News
Reita: Commercial property price drop increasingly expected
Commercial property prices are expected to decline and increasing numbers of people predict this will be the case.
Research carried out for Reita found a rise in financial advisers who think the costs will drop.
Some 24% of 269 independent financial advisers (IFAs) made the prediction in July, which was a large climb from the 6% who said so in January 2010.
Chairman Patrick Sumner stated: "The growing concerns among advisers reflect justifiable uncertainty about the economy over the next year or two, mainly in the light of public sector cuts."
However, there was also a large number of IFAs who thought business property prices would rise, with 49% suggesting this could happen.
While it may seem like a large number, this is down from the 73% who believed this to be true in January.
Despite this level of uncertainty, many advisers are convinced investors will take an interest in Real Estate Investment Trusts.
Mr Sumner said some of the hesitation could be explained by recent news of a drop in house prices.
Earlier this week, the Royal Institution of Chartered Surveyors published the results of its UK Housing Market survey.
It was revealed there had been a drop in the cost of residential property during July - the first time this has occurred since July last year - with spokesman Ian Perry predicting this could continue for the rest of the year.
"We are in the early stages of a slow economic and commercial property market recovery, in the course of which there will be the odd lurch," noted Mr Sumner.
However, he reveals high-quality retail property will set itself apart, as well as those that have strong balance sheets.
Reita is funded by a range of leading companies in the financial services and commercial property industry, the London Stock Exchange and other bodies such as the British Property Federation.
Posted by Sarah Smith
Research carried out for Reita found a rise in financial advisers who think the costs will drop.
Some 24% of 269 independent financial advisers (IFAs) made the prediction in July, which was a large climb from the 6% who said so in January 2010.
Chairman Patrick Sumner stated: "The growing concerns among advisers reflect justifiable uncertainty about the economy over the next year or two, mainly in the light of public sector cuts."
However, there was also a large number of IFAs who thought business property prices would rise, with 49% suggesting this could happen.
While it may seem like a large number, this is down from the 73% who believed this to be true in January.
Despite this level of uncertainty, many advisers are convinced investors will take an interest in Real Estate Investment Trusts.
Mr Sumner said some of the hesitation could be explained by recent news of a drop in house prices.
Earlier this week, the Royal Institution of Chartered Surveyors published the results of its UK Housing Market survey.
It was revealed there had been a drop in the cost of residential property during July - the first time this has occurred since July last year - with spokesman Ian Perry predicting this could continue for the rest of the year.
"We are in the early stages of a slow economic and commercial property market recovery, in the course of which there will be the odd lurch," noted Mr Sumner.
However, he reveals high-quality retail property will set itself apart, as well as those that have strong balance sheets.
Reita is funded by a range of leading companies in the financial services and commercial property industry, the London Stock Exchange and other bodies such as the British Property Federation.
Posted by Sarah Smith
Fri, 13th Aug 2010