Commercial UK - Property Values Look Gloomy So Should You Sell?
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The market in commercial UK property continues to steer an unpredictable course, for both investors and property owners alike. After the turmoil of the last few years, with a spectacular boom and bust cycle that both fed into, and was fed by, the credit crunch, the market still seems set for choppy waters in 2010 and beyond.
The last 12 months have seen a recovery of sorts, in certain sectors of the commercial UK market, and in certain locations, namely London and parts of the south east, with a gradual economic recovery helping reduce tenancy void rates and the return of investment cash. Capital growth rates did briefly spike sharply in early 2010, but have since slowed considerably, according to the June 2010 IPD UK Monthly Index. The same reports showed that the decline in rents slowed over the last year. This combination of declining rents, and renewed capital growth, has compressed commercial property yields for property let on 20 year leases to excellent/strong companies, mainly in London and in other small pockets, which are at the lowest for 18 months.
But what does the commercial UK property market hold in store for the medium term future? There appears to be a somewhat gloomy consensus. The IPF Forecast sees a slip back for the market:
"The dip in capital values next year is now predicted to be worse than previously expected. The quarterly survey shows that all sectors, except West End offices, have seen downward revisions to capital value growth forecasts. Standard shops are expected to perform the worst, with forecast capital value falls of 2.4%" (IPF UK Consensus Forecast Survey).
Additionally sentiment on the future of commercial UK property rents is similarly dour, with the Q2 RICS Commercial Property Survey stating:
"...rental expectations to be negative in all three sectors. Significantly, the office market, which did record a positive net balance in the first three months of the year, was unable to sustain this through the spring. Meanwhile, the numbers of respondents anticipating rents to fall further rather than increase in the industrial sector actually rose in the latest report."
So, commercial property prices are unlikely to be as favourable as they are now. This does point rather strongly to now being the best time to make a sharp exit from commercial UK property. After all, we may be at a peak in the commercial UK property cycle, and so opportunities for gains may not present themselves for a while.
If a sale of your commercial UK property is indeed on the cards, who is best placed to handle the divestment, when speed of execution is paramount? Quite possibly a commercial estate agent is not the best road to go down- quality buyers are scarce, and agents are notoriously slow and expensive.
Selling direct to SellMyCommercialProperty might be the answer. We are company with considerable lines of finance earmarked for the commercial UK property sector. As a result we are able to position ourselves as a buyer of first resort- we can complete a sale quickly, with a minimum of fuss, and no fees. Our experienced team of professionals (from across the relevant fields of property, finance, surveying, accountancy and law) can make an initial assessment of your situation within 48 hours. Then you, the investor, can realise the funds due from your commercial property, well before the market can knock back your returns. Simply get in touch with SellMyCommercialProperty, and we can help you to release funds for your next investment opportunity.
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