Wednesday, Aug 04, 2010
Commercial property double-dips
Guardian: Property price rises slowing, British Land warns
Recovery in property prices has tailed off, while shortage of City office space ensures ever higher rent. British Land has warned that the recovery in property prices has slowed in recent months, although an acute shortage of office space in London is continuing to drive rents higher. The property developer, the biggest office landlord in the City, said today that while demand for prime office and shop space remains strong, the growth in values tailed off between April and June following the sharp recovery of the previous six months.
Posted by drewster @ 08:10 PM (1100 views) Add Comment
6 Comments
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1. Crunchy said...
Why are people assuming that there will be a double dip.
Personally, I see the distinct possibility of several ahead with each valiant attempt to win through, just think of the England team.
A lack of cohension, solid belief along with a less than suitable Rolling Stones members tradition.
2. hpwatcher said...
Double dip.
3. miken said...
Oh dear, prices stalling when interest rates are 0.5% and before austerity kicks in.
It wont take much for a massive collapse.
4. str 2007 said...
I think commercial property gives a better indication as to what may be happening.
The article implies not much space available in London which is generally a leading indicator.
However one of the comments below indicates there's plenty of space.
and from a personal point of view, being involved with Commercial Interior Fit Out in and around London then I'd say work is relatively subdued and I certainly know of buildings that were refurbished for occupation as far back as 2007 that still have empty floors.
The article does mention UBS commissioning a new building in the City which they will rent with annual rent increases inline with RPI.
This seems an astonishingly bad deal (not having read the small print myself obviously) given the bank has the money and I would have thought power to negotiate a far better deal than annual rent increases in line with RPI.
Unless of course they know that
1/ Commercial property values will crash (hence they'd rather rent than buy)
2/ They know residential property prices will crash bringing down RPI (in which they're included I believe).
One poster on the article implies they are upward only rent reviews - whether that's right or not I don't know.
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