Sentiment in commercial property sector ‘is buoyant’

Posted 02/03/2010

An increasing number of investors are turning back to commercial property due to the possible yields available.

This is according to Fiona Rowley from the M&G Property Portfolio, who said that potential returns on investment are attractive when compared to other assets such as government bonds and cash, Easier.com reports.

She said this is driving positive momentum in the sector and providing an improvement in investor sentiment.

However, the expert warned that she expects rents to continue falling in 2010 due to weak tenant demand.

“If the tentative signs of improvement in economic activity continue during the year, this should begin to feed through to the occupier market and bolster tenant demand for 2011,” Ms Rowley added.

This is echoed by Ian Coull of office developer Segro, who recently said he expects the UK’s commercial property sector to lag behind that of continental Europe for at least a year in terms of recovery.