US Commercial Market Picking Up

US commercial properties are continuing to post improvements in their value, despite the uncertain economic conditions in the country. According to Investment Property Databank's (IPD) US Quarterly Property Index, the asset class has seen capital growth of 3....

US commercial properties are continuing to post improvements in their value, despite the uncertain economic conditions in the country. According to Investment Property Databank's (IPD) US Quarterly Property Index, the asset class has seen capital growth of 3.2 per cent in the third quarter of 2010.

This quarterly growth rate is an improvement on the previous quarter's 2.1 per cent increase. IPD claims that the rebound has been caused by yield compression, after returns shrank by a little over a half of one per cent to 6.5 per cent.

Managing director of the performance analysis company in North America, Simon Fairchild, commented: "The rebound in US real estate markets reflects the continued flight to quality, as investors move towards core assets where prices continue to rise despite the fragile broader economy. Capital is returning to the market and assets are beginning to trade as new lending is increasingly available."

The news comes after research from Jones Lang LaSalle suggested that globally, the commercial property market is expected to grow by between 25 and 30 per cent in 2011.

- Tuesday 23 November 2010

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