Commercial property values to halve, says RICS
Monday, December 15, 2008
The value of UK commercial property will have more than halved by the end of the decade as rental demand continues to wane, according to a report out today.
The Royal Institution of Chartered Surveyors (RICS) predicts that the commercial property market will see a fall of at least 16% in capital values in 2009 and up to 10% in 2010. Capital values have already fallen 25% since the onset of the credit crunch in June 2007. This would mean steeper falls than in the recessions of the 1970s and early 1990s.
Oliver Gilmartin, senior economist at RICS, said: "We are only halfway through the price correction in the commercial property market, with values set to fall through 2009 and 2010 as rental declines gather pace. Transaction activity is set to rise, however, as more sellers become willing to accept lower bid prices."
The report says that rising defaults will prevent a near-term recovery, and the investment market will be sluggish for some time to come.
Article continues at Guardian online
The Royal Institution of Chartered Surveyors (RICS) predicts that the commercial property market will see a fall of at least 16% in capital values in 2009 and up to 10% in 2010. Capital values have already fallen 25% since the onset of the credit crunch in June 2007. This would mean steeper falls than in the recessions of the 1970s and early 1990s.
Oliver Gilmartin, senior economist at RICS, said: "We are only halfway through the price correction in the commercial property market, with values set to fall through 2009 and 2010 as rental declines gather pace. Transaction activity is set to rise, however, as more sellers become willing to accept lower bid prices."
The report says that rising defaults will prevent a near-term recovery, and the investment market will be sluggish for some time to come.
Article continues at Guardian online
Labels: commercial mortgages, commercial property prices, RICS
