29-08-2007
Commercial property market on shaky ground
Commercial property investors who borrowed hundreds of millions of pounds during the period of low interest rates and fast price growth are now worried about meeting payments and the threat of negative equity.
Although the demand for commercial property has remained strong so far, confidence in the market has started to crumble, with commercial prices expected to fall more than 10 percent over the next three years.
Changing sentiment towards the commercial sector is showing in the share prices of big players such as British Land and Land Securities, who have lost almost a quarter of share value since January.
Agents have predicted that demand for office space in prime locations will remain steady, but there may be a slowdown for buy-to-let schemes in city centres. Investors may begin targeting large, fluid markets such as New York, London or Tokyo for commercial opportunities.
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