The UK commercial property market is facing significant difficulties and will perform worse in 2008 than other European countries, according to a leading researcher.
Peter Hobbs, London-based head of research at RREEF Real Estate, made the predictions following record falls in appraisal values in November, Bloomberg has reported.
"The UK market is falling apart," he said. "There’s a risk that this cyclical downturn turns into something worse.”
The last time UK commercial property values fell was in 1995. This time, the slide is "looking shorter, sharper and more shocking than even we had expected," Bloomberg reported Mike Prew, a London-based analyst at Lehman Brothers Holdings, as saying.
There is still strong demand for properties in the capital. International businesses remain keen to make use of offices in London because of their central location and the capital’s international travel connections.
Andy Berrow, senior business advisor for Business Link, said the current financial climate could cause business to take less risks.