Eurozone crisis may harm UK commercial property values, warns GPE
Published on
14/11/2011 16:42:19
The current debt crisis within the Eurozone could lead to a
dramatic fall in commercial property values across London,
according to one of Central London's biggest landlords, Great
Portland Estates (GPE).
The worsening of economic conditions across Europe has led to a
number of businesses choosing to scrap their search for new office space to let and this in turn has
placed increasing pressure on rents.
Prime properties in the West End and City are likely to be
protected as a result as a "significant number of proposed
developments will be deferred or cancelled", according to Toby
Courtauld, chief executive, GFE.
Mr Courtauld also expects "secondary and overpriced assets to
see a price correction as buyers become more discerning".
Michael Burt, analyst at Espirito Santo, warned GPE is facing
"weaker short-term visibility over the outlook for rental growth,
despite supportive medium-term supply side fundamentals".
Across the country as a whole commercial property values were
flat in October at 0.0 per cent, from 0.1 per cent in September.
Retail and industrial space saw 0.0 per cent price growth in
October; however office space price growth did increase by 0.1 per
cent.
Commercial property experts believe office and retail space
within the capital has driven returns since the recovery from
global recession began. Nevertheless, the worrying crisis in the
Eurozone has taken its toll on capital growth, with occupier demand
and investor sentiment at odds.