A recent survey among economists, analysts and executives carried out by Bloomberg has suggested the UK commercial property sector could see values slide in 2012, due to continued fears of Britain's economic growth and the ongoing eurozone debt crisis. On average, those questioned anticipate the price of these kinds of assets could fall by 4.9 per cent over the next 12 months, with some expecting this to be up to seven per cent, while others believe it will be much lower, at around 2.5 per cent.
Chief property economist at Capital Economics Ed Stansfield told the news provider there is a lack of confidence among UK businesses. "They're not investing, they're not employing, none of which is good news for the commercial property sector," he stated. It isn't only firms that are being impacted on by the financial worries in Europe, with chief executive of the British Council for Offices Richard Kauntze recently noting the situation is affecting developers too. He commented: "I think the economic background - with the uncertainty in the eurozone - means that tenants are still very nervous and are delaying or deferring decisions wherever they can. I think that will have an impact on what developers choose to do next year."
London's property market has repeatedly outperformed other regions of the UK this year and that looks set to continue, with Sue Munden, analyst at Seymour Pierce, telling Bloomberg that clients of her organisation are being advised to focus on investing in firms that hold assets in the capital city. "In order for rents to rise, you need the economy to be positive, to have GDP (gross domestic product) growth and London is probably the only area in the UK that has remained buoyant," she asserted. Findings published by Savills earlier this month revealed the city has been the preferred location for cross-border investors for the past four years. According to the firm, over GBP 45 billion was ploughed into London's commercial property sector between 2007 and 2011, almost double the amount invested in Paris's market, the next biggest target among international investors.
- Tuesday 03 January 2012