Commercial property owners ‘benefiting from capital appreciation’

Posted 18/04/2010

Conditions in the UK’s commercial property sector are continuing to improve, the findings of a new market report suggest.

Owners of commercial property suffered during the recession, as the spike in business failures left them facing difficulties in collecting rents and with more vacant space than they would have anticipated.

Those factors combined to push down rents and capital values, but a report by Investment Property Databank (IPD) shows the situation is changing.

Its figures show average capital growth in the UK commercial property sector of 1.6 per cent in March 2010, contributing to a quarter one growth rate of 3.9 per cent.

IPD’s head of UK client services Malcolm Hunt said the figures show the commercial property market is enjoying a strong recovery, but admitted the immediate future is still a little uncertain.

“Going forwards, the strength of the occupier market and stability of the wider economy, as we approach a possible change in government, are crucial components for a continued market recovery,” Mr Hunt explained.

The figures come just weeks after a report by real estate consultancy CB Richard Ellis concluded that UK commercial property enjoyed average capital growth of 4.4 per cent during the first quarter of 2010.