Interest in commercial property rises sharply

Interest in commercial property rises sharply


It would appear that the commercial property market is finally enjoying a bright spot after two years of tumbling values and turmoil.

The Investment Property Databank UK index figures for September recorded an increase of 1.1% in property values, making it the highest monthly rise since June 2006 and causing many investors to claim the market has undergone an extraordinary recovery.

Furthermore, the Financial Times newspaper reported that investment levels in London are currently higher than the long-term average, with foreign investors and funds eager to snap up prime properties as the market bottoms out.

Property experts have called the recovery “demand-led”, with Savills stating that the imbalance between demand and supply for London property equates to £500 million of property for sale against £7.5 billion in funds seeking to invest.

The lack of properties available has been put down to owners riding out the downturn and banks being reluctant to call in the massive property loans that remain outstanding.

However, some investors are remaining cautious about the sudden good fortune of the sector, with Ric Lewis, chief executive at fund manager Tristan Capital Partners, commenting: “It may have stopped raining but it is still flooded.”

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