INDUSTRY NEWS

Commercial property: Stabilisation is unlikely

Commercial property prices are unlikely to stabilise in the coming months, says the British Council of Offices (BCO).

Chairman of its research centre, Mat Oakley, disagrees with recent research conducted by Investec. He predicts the market will see "continual softening into 2009".

"Back in April, perhaps one might have been taking a reasonably optimistic view on when the end of the credit crunch was going to occur," Mr Oakley commented.

He noted the problem for potential investors in commercial property, is the lack of sellers.

"There is no significant distress amongst property owners at the moment so they are not being forced to sell."

Investec’s poll of 137 property professionals in April found more than half (57 per cent) thought commercial property valuations would stabilise before the year is out.

The most recent figures, from the Investment Property Databank have revealed commercial property returns fell by 1.5 per cent last year.

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