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Pessimism sets in for Commercial Property Recovery
17/09/2008
British commercial real estate recovery has been declared impossible by experts, ad the set back is expected to last for the next year-and-a-half.
The most recent quarterly survey by Investment Property Forum (IPF), shows that property experts have slashed their expectations for the UK market within the last three months. An average drop of 15.7 per cent in capital values is now the projection for 2008, followed by a 5.5 percent capital loss in 2009.
In the previous quarter's report, forecast total returns - which combine capital growth and rental income - fell by more than half to minus 10.6 percent for 2008, and to zero from 4.7 percent for 2009.
Capital growth was predicted deep in the red for office, industrial and retail sectors.
The prognosis for 2010 however, was more favourable where total return predictions had slipped only by 8 percent.
"This is clearly where hope of recovery lies, both in the commercial property markets and the wider economy," IPF said in a note.
The most recent quarterly survey by Investment Property Forum (IPF), shows that property experts have slashed their expectations for the UK market within the last three months. An average drop of 15.7 per cent in capital values is now the projection for 2008, followed by a 5.5 percent capital loss in 2009.
In the previous quarter's report, forecast total returns - which combine capital growth and rental income - fell by more than half to minus 10.6 percent for 2008, and to zero from 4.7 percent for 2009.
Capital growth was predicted deep in the red for office, industrial and retail sectors.
The prognosis for 2010 however, was more favourable where total return predictions had slipped only by 8 percent.
"This is clearly where hope of recovery lies, both in the commercial property markets and the wider economy," IPF said in a note.