DTMark Posted November 16, 2012 Share Posted November 16, 2012 Had wondered about this before, and I'm sure someone here can help out.. Our local town has had units to let for years now. Each month, more shops close down and more signs go up. The number of TO LET boards is really noticeable now. All with the same agent - not sure if that's significant (called Glanfield Holmlund) I'd understood that one of the reasons stores were closing was high rents. I understood that commercial property is valued based on rent value, so reducing the rent might reduce the notional paper value of a portfolio. Except that... isn't is easier to sell a commercial property with a tenant in-situ? Is some landlord sitting on much of this property desperate to sell it (hence why no rent incentives or reductions), and in the end the properties will get reposessed? Is none of it mortgaged at all and it makes more sense to take zero yield and sit tight.... how does this work? As, if I were interested in buying retail space, which seems like an odd thing to buy right now, I might ask "when was it that the property was last occupied?" and if the truth is "four years ago", as is the case for some, I might be disinclined to pay top rates for it anyway. Is my understanding anywhere near correct, and what breaks this deadlock? Quote Link to comment Share on other sites More sharing options...
Wurzel Of Highbridge Posted November 16, 2012 Share Posted November 16, 2012 I believe much of this high street commercial property is held by pension funds (I have no proof or link). It's very much a game of sticking your head in the sand, collecting your wages and pretending that your not bankrupt as there will never be the demand for high street shops like there was in the 80's & 90's. the question on my mind is when does this all go pop? I guess when pension funds are empty and they are forced to liquidate, of course this will not happen and they will be bailed out by the government. I would then expect these worthless properties to bee drip-fed into the market of a 10 - 20 year period. Quote Link to comment Share on other sites More sharing options...
Wurzel Of Highbridge Posted November 16, 2012 Share Posted November 16, 2012 (edited) Article about commercial property and pension funds (edit - the boomers did it) Edited November 16, 2012 by khards Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted November 16, 2012 Share Posted November 16, 2012 If savers had £1,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000 in the banks, the banks would make enough money from low interest rates to write down all the losses this year. But they don't have that much, so it's going to take longer. Drip rob savers, write down losses, take bonuses, drip rob savers write down losses, take bonuses, etc. They cannot write down so much that it would affect their bonuses Quote Link to comment Share on other sites More sharing options...
dangermaus Posted November 16, 2012 Share Posted November 16, 2012 Hereford is like this, someting like 1/4 are charity shops and there must be 1/10-1/5 empty. Shocking Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted November 16, 2012 Share Posted November 16, 2012 Had wondered about this before, and I'm sure someone here can help out.. Our local town has had units to let for years now. Each month, more shops close down and more signs go up. The number of TO LET boards is really noticeable now. All with the same agent - not sure if that's significant (called Glanfield Holmlund) I'd understood that one of the reasons stores were closing was high rents. I understood that commercial property is valued based on rent value, so reducing the rent might reduce the notional paper value of a portfolio. Except that... isn't is easier to sell a commercial property with a tenant in-situ? Is some landlord sitting on much of this property desperate to sell it (hence why no rent incentives or reductions), and in the end the properties will get reposessed? Is none of it mortgaged at all and it makes more sense to take zero yield and sit tight.... how does this work? As, if I were interested in buying retail space, which seems like an odd thing to buy right now, I might ask "when was it that the property was last occupied?" and if the truth is "four years ago", as is the case for some, I might be disinclined to pay top rates for it anyway. Is my understanding anywhere near correct, and what breaks this deadlock? You might find the council own a lot of the units and wont drop the rents, they just tax everyone more to make up for it Quote Link to comment Share on other sites More sharing options...
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