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gruffydd

Major Warning Issued Re: Losses On Uk Commercial Property

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I'm one of many on here who have been wondering when this bombshell was going to explode. Given the state of the economy this could be massive. Hold on to your hats.

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Guest KingCharles1st

Commercial rent- business survivability- private rents

Vicious- downward- spiral

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It is no surprise. Just jump into your car and go for a drive. Many Car dealerships are shutting up shop for good, or they are turning into temporary car washers.

If anyone has visited Hedge End there is a small retail park comprising of a closed Land of Leather, MFI, and Courts. The only store open is the Car Phone Warehouse. Small satelite retail parks are the most vunerable IMO.

Edited by Lord Sandwich

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I'm one of many on here who have been wondering when this bombshell was going to explode. Given the state of the economy this could be massive. Hold on to your hats.

When it goes, and it should have gone a long time ago, it'll finally bury any more nonsense about a recovery.

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It is no surprise. Just jump into your car and go for a drive. Many Car dealerships are shutting up shop for good, or they are turning into temporary car washers.

If anyone has visited Hedge End there is a small retail park comprising of a closed Land of Leather, MFI, and Courts. The only store open is the Car Phone Warehouse. Small satelite retail parks are the most vunerable IMO.

Offices are most vulnerable in my view, followed closely by retail. Nothing is immune though there's massive oversupply in industrial too and little appetite for the land for housebuilding.

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Did you get that ... there wont be huge losses for the banks .. its covered under the tax payers asset protection scheme !!

What's also interesting is that the budget showed business rate income this year as being static. This will be because the legislation was changed so LLs have to pay full business rates on empty properties instead of the previous 50%, which would have significantly reduced business rates revenues during the recession. Therefore, the govt isn't forecasting any decline in business rates revenue as it's expecting LLs to pick up the tab.

If the banks take possession on defaulting properties they will be liable for the business rates. Which effectively means the govt will have to pay its own business rates bill to itself.

What govts have done with this bank bailout is just bought a great big pile of worthless sh1t that no-one wants and a lot of which was the apparatus by which the govt raised revenues to finance itself.

It's like a farmer had an apple tree of which he paid 30% of the crop to the govt in tax. What's happened is the tree's just been uprooted and dumped on the doorstep of the govt, with a note to say, you sort it out. It doesn't know how to grow an apple tree and its got no apples coming in to use to reward anyone else to do it for them. (this analogy ended up being more convoluted than I'd originally intended)

Edited by Soon Not a Chain Retailer

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Forgive my ignorance but what is the value of all CMB securities currenty in circulation, relative to RMB securities?

As we all know the credit crunch began when (retail) sub-prime mortgage holders started defaulting on their mortgages.

Is their a parallel in commercial property sector? Are there such things as commercial Alt-A mortgages, etc?

If significant numbers of commercial mortgage holders defaulted on their mortgages how likely are we to see a repeat of the original credit crunch? Would it be more or less severe? Could central banks and governments do anything to prop their economies up with bailouts and QE in such an event?

Where is CGNAO when you need a doomsayer?

Edited by Dave Spart

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Commercial real estate finished off HBOS, so we can assume it's a big problem (bigger than residential?).

CRE unit trusts are still yielding below 6% for frankly lacklustre property portfolios, so I assume valuations are still too high IMHO, especially if tenants start getting their rents slashed.

In the longer term it could be a good investment though, as current tax law stupidity means that it's better to demolish CRE (and perhaps it's cheaper to rebuild the place when a new tenant is found?)

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I'm hearing stories of empty properties being demolished.

Yes to avoid paying business rates. If you own an empty business property the owner needs to pay the business rates!

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If anyone else is looking for a proper doomsayer, look no further than this Gerald Celente video:

(The comments from 6:01 onwards relate specifically to this thread and are especially scary as he made them in February)

Link

Edited by Dave Spart

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If anyone else is looking for a proper doomsayer, look no further than this Gerald Celente video:

(The comments from 6:01 onwards relate specifically to this thread and are especially scary as he made them in February)

Link

I remember SO clearly - about 18 months/2 years ago - the VI's were ramping commercial property BIG TIME..... And I just heaved a huge sigh...... It was as clear as daylight that it was about to implode massively... I really do wonder at the so-called "experts".... It was ABSOLUTELY CLEAR - the commercial [and residential] property "market" had reached the top of the greatest bubble of all history.... It was GROSSLY over-inflated.... Shops/warehouses/factories//offices ALL OVER THE UK were [and still are] sitting empty. IT WAS AND STILL IS PLAIN TO SEE!!!! You CAN'T miss it!!??! :rolleyes:

Edited by eric pebble

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I'm one of many on here who have been wondering when this bombshell was going to explode. Given the state of the economy this could be massive. Hold on to your hats.

Yup!

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Hey Eric,

Did you see the video? Fast forward to 6:01 if necessary.

I found myself laughing in despair.

Edited by Dave Spart

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