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Price corrections will continue into 2008 and commercial property transactions will fall by 20 per cent, according to a senior property industry executive.
Tony Horrell, chief executive officer of European capital markets at Jones Lang LaSalle, made the predictions following research from the firm, which found European deals fell by an estimated 13 per cent last year, Thomson Financial has reported.
"The key issue going forward is the health of the overall financial markets and the availability of debt," he said.
He believed "at the moment there is a discord between the financial and the real estate markets," but predicted the economic situation would support Europe’s occupier market.
Investors with business property and offices in London will be affected, however "once some of the debt-backed investors come back into the market we should see a greater momentum of activity," he said.