Commercial Property Values - Is The Bubble About To Burst Again?
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Find out what's really going on in the Commercial Property Space with Jason Werth, our MD and Commercial Property expert.
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- The current Commercial Property market
- Future property values
- Market trends and reports
- Sector & Geographical analysis
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The commercial property market has gone through a wild ride over the last few years. An overwrought property bubble was burst back in 2007/8, with consequences that rolled around the global economy. Whichever sector of the commercial property market you take an interest in - the office space sector, retail & shopping outlets or industrial/ manufacturing units - you will have shared the same volatile journey over the last few years. And all three commercial property sectors are now facing a decidedly bleak outlook.
Since the start of the fall, from the peak in the commercial property market in 2007, commercial business property valuations as a whole have fallen by 40-50%. The trough was hit in July 2009, according to the respected IDP Index, which tracks commercial property values in the UK. Since then there has been a modest recovery.
The office sector fell the fastest, but has since rebounded in certain pockets on the UK, even managing to post modest growth year on year in Q2 2010. Retail and industrial rents fell less severely, but have also recovered more slowly over the last year.
But what of the prospects for commercial property capital values and rents in the medium term? The latest IPF Forecast report is very downbeat - it indicates an expectation of another dip in the value of commercial property, with the retail sector to be especially hit. In these circumstances, now would seem a good moment to hit the market with your sales. What are your options if you have commercial property that could be released for sale?
The most well trodden path is to the door of the local business or commercial property estate agent. These are the most familiar partners for getting your business or premise sold, putting their local market knowledge to good use - the best business estate agents can be well connected and competent middle men. The drawbacks of signing the property or business sale to an agent are the high fees and the lengthy sales process (including constant viewings of your premises).
Another familiar option is the commercial business auction house - but it is really the last stop, when other options have been exhausted. You may get hold of money quickly, but the price for your commercial property may be disappointing and you will still be paying commissions and fees. Additionally there is no guarantee that your a sale will be reached on auction day so you really need to understand if your property is right for an auction.
Of course you could try and find a private buyer yourself, and this may work for you if you have good contacts locally, and the buyers are there. Unfortunately, with the current depressed outlook for commercial property, they may well not be, especially since banks are still not lending.
There is another option, however, that may be the best for you in the current climate. SellMyCommercialProperty are a commercial property investment company with substantial funds, who are looking for commercial property to buy as part of our investment strategy. We can make initial valuations within 48 hours, and then agree a sale quickly. You get a fair price, with no agency fees or commissions to pay, and none of the hassle of middle men. Get in touch with SellMyCommercialProperty and we will help turn your commercial property headache into an opportunity.