Thursday, July 22, 2010
Let the unloading of commerical property begin
Despite the fastest and deepest commercial property slump since records began â€“ a peak to trough fall of approximately 44pc â€“ there has so far been only limited impairment applied to these assets. That may be about to change. According to a recent De Montfort University study, there is approximately Â£300bn of banking loans outstanding to the British commercial property market, of which approximately Â£50bn is in breach of covenant. A minimum of Â£50bn of property coming onto the market cannot be postponed much longer. This will surely make commercial property prices fall much further and restrict lending due to their losses.