Commercial property forecast paints bleak picture

Commercial property forecast paints bleak picture


The latest quarterly survey from the Investment Property Forum has predicted a more serious decline in commercial property values than previously expected.

Property experts, including fund managers, advisers and equity analysts, have said that capital values will decrease by roughly 17.9% this year and 3.8% in 2010.

This makes a much gloomier prediction than estimates compiled in November, forecasting an 11.5% drop during 2009, and a 0.8% drop in 2010.

The Investment Property Forum has said that the downward revisions are due to the “worsening economic outlook” as GDP falls and unemployment increases.

However, experts do see an end in sight, albeit in the distance. Recovery has been predicted for 2011, with capital values expected to rise 4.1% across all commercial property sectors.

Since the peak of the commercial property market in June 2007, commercial property values have plunged by 37.4%, according to data from the Investment Property Databank.

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