Recent commercial property reports in the British press recently have been hailing the arrival
of the long-awaited ‘Bottom’, yes that’s right, as far as commercial property goes - all signs are that
it’s bottomed out.
As the U.S. commercial real estate continues it’s slump as foreclosures and defaults keep rising, many commentators in the U.K. are announcing the bottom has arrived, and from here on in, it can only go upwards. The bottom in commercial property has arrived, and it’s good news from here. According to analysts, the U.K is well placed for a recovery, whilst many eurozone economies continue to look unstable.
Hammerson, one of the leading european property advisors, has reviewed it’s figures and has stated that the U.K commercial market has started to turn towards recovery. With the decline of rental rates slowing and more investors arriving from out of the U.K to stir up interest, all the signs are pointing towards the intial stages of a turnaround. ‘The near future will see a turnaround’, Hammerson said in their release, as well as expecting to see a decline in the rate of default in the prime commercial sector.
Decline Eases
Recent reports noted that in may 2009, prices in the commercial sector decreased by only 1.5% - the lowest fall in 12 months. Prices have declined over 40% since the peak of 2007.
Predictions are that commercial property which is poor locations on condition are expected to fall around 10% this year, whilst property towards the high-end of the market is now expected to rise considerably over the next 12 months.
Prices on the U.S.
Across the Atlantic, there is a very different story. Defaults and bankruptcies continue to rise with the total of commercial property now in default estimated at over $100 million - more than double from the start of the year. Hotels and retail space remains high on the list of problem property.
There remains great concern as to where the solution will come from, as the problem isn’t going away, but getting bigger. President Obama only this week stated that the government’s reform and fiscal aid’s effects will really only be seen towards the end of the year. There is talk in washington of another stimulus plan being drawn up, if the money is there to be spent. Talks continue.
In California, the U.S.’s most populated state with 18 million inhabitants, foreclosed properties continue to dominate the real estate landscape, and in Dallas commercial real estate foreclosures have jump 12% from the start of the year. On the upside of course is the opportunity for buyers to capture real estate deals well below market value.
To see what’s happening in your local area, Click Here to search for Commercial Property.