Insurance News Archive

Commercial property in 'most challenging period in generations'

Commercial property is "facing one of the most challenging periods in generations", according to an expert.

Peter Salway, chief executive of the UK's biggest commercial property developer Land Securities, said yesterday [January 20th] that the firm will need to sell a number of its assets to protect its finances.

"Commercial property has gone through an unprecedented period of re-adjustment. The speed of valuation decline allied to rising insolvency rates mean the sector is facing one of the most challenging periods in generations," he asserted.

He added that Land Securities will need to maximise returns from its multi-billion pound portfolio of properties, which includes shops and offices.

This week, an expert said commercial property values have fallen further than market data implies.

A spokesperson for real estate provider Savills said the IPD UK monthly index has "probably underestimated" how far returns have declined as there is a lack of evidence for the data to be based on.

21 Jan 2009