The Independent has reported that the commercial property market is showing signs of life. Granted that coming from a very low base line any improvement is going to look significant. However good news is good news.
Here’s a snippet of the article, you can read the full piece here.
About a year ago, observers of the UK commercial property market would not have been shocked to see the Four Horsemen of the Apocalypse riding around the corner.
The banks would not (and, indeed, could not) lend, companies were not looking for office space, particularly in London, and firms that would consider signing new leases were only looking for short-term agreements, on smaller offices. Those that can recall the demise of Woolworths can guess what retailers thought of taking on more space.
The property market slump had long been signalled. Two years ago, the Royal Institute of Chartered Surveyors (Rics) fired a shot across the bows of the industry, warning that demand for buying and letting commercial property had fallen to a four-year low, stoking fears that the sector was heading for a depression not seen since the early 1990s.
The article goes on to discuss the availability of commercial property and equally importantly the availability of commercial mortgages.
“Recent price rises have largely been driven by the shortage of supply. While there are many potential buyers of commercial real-estate, at the moment not many people want to sell. In addition, real drivers of value are still weak,” says Jonathan Thompson, head of real estate and building at KPMG. “Reduced spending by consumers, along with business failures, is driving down occupancy and rental rates; would-be renters and purchasers of commercial property are still in short supply.
Has to be stressed that we are coming up from a very low baseline with hardly any activity on the commercial property market, however interest rates are still low, and with the economy looking better this may be the time to start looking at commercial mortgage options again.