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* Business * Investing Retail Therapy: Bullring Sale Marks Property Turnaround

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http://www.guardian.co.uk/business/2009/se...ment-turnaround

Birmingham's Bullring shopping centre and its futuristic Selfridge's store, pictured, has become the cornerstone of the city's shopping district and yesterday its partial sale marked a turning point in the fortunes of a battered property sector.

A string of commercial property deals in the last few days culminated in the sale of Land Securities' slice of the Bullring for £210m to the Australian government fund.

Last week, the Qatari sovereign wealth fund increased its stake in the Canary Wharf tower in London's Docklands in a deal that also saw the China Investment Corporation take its first major stake in UK property. In addition, the US private equity group Blackstone recently took a slice of the Broadgate office development at Liverpool Street in the City.

Land Securities said its share of the shopping centre was 5% higher than its value in March and according to property consultants King Sturge, almost all of the Bullring's rise in value came in the past month, which registered the first aggregate jump in prices for more than 18 months.

The company's research partner, Andrew Burrell, said the return of UK investors to the investment market, albeit in modest numbers, had put a floor under prices and started a long march back to growth.

Before the turning point, prices had fallen almost 50%, dragged down first by the financial crisis and then by a recession that robbed the industry of tenants and forced cuts in the eye-watering rents property firms had been charging in the run up to the crash.

Slumped

Land Securities saw the value of its portfolio cut by £4.7bn this year. Its share price slumped from more than £20 a share before the credit crisis took hold to £3.24. Other property firms suffered similar falls in value and a flight of investors.

Burrell said reaching the bottom of the market and glimpsing an upturn in prices is unlikely to trigger a quick return to boom times. If the recession persists, the finances of many property firms could continue to deteriorate, especially if more tenants go bust or demand cuts in rents.

Kelvin Davidson, property economist at Capital Economics, warned that restrictions in bank financing would also play a part.

"We have clearly seen the bulk of the investment market correction. Investors seem to be confident and fund managers have begun to raise money to buy. So there is bound to be a short-term bounce over the next six to 12 months as investors come back into the market," he said.

So the floor is being called!

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So the floor is being called!

Nope.

But UK companies are still leveraged, and those foreigners whose currencies are substantially up against £ see bargains everywhere.

Well OK, yes, perhaps this tells us UK commercial property companies can raise money and won't go bust. So I guess it does help put a floor on their share price in case of sentiment taking another big fall.

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