Where are Commercial Property Values now……?
14th May, 2012.
Where are Commercial Property Values now…..?
By Justin Marshall, Investment.
……31% below their peak according to the Investment Property Databank (IPD) in their latest report on the state of the commercial property market..
The IPD reported a softening in the average values for offices, shops and industrial/ warehouses with them falling by 0.7% in the first three months of 2012.
It is the reality of the market that values have fallen so far and there are certainly a few people still “hugging” their historical valuations pre 2008 but the true market for buyers, sellers, agents and perhaps most relevantly for valuers is that values are now nearly a third – 31% below the peaks of 2007.
The opportunities are there in the market but some real nervousness still exists and that is demonstrated by the gap between prime and secondary values is now the widest it has been since the early 1990’s. Secondary properties have fallen 6.1% in value over the last six quarters, which shows the real demand and what has been a ‘flight’ to quality in the last four years.
Malcolm Frodsham, Director of Research at IPD, said: “The UK has fallen back into a technical recession largely due to a lack of business demand and a construction slump. As property values potentially continue to decline, investors are unlikely to want to develop, which will lead to further pain.
The strategies of Investors particularly needs careful planning and advice. We are purchasing investment stock for clients and for discerning, informed purchasers there can be some really good opportunities.
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