Insurance News Archive

Commercial property oversupply 'affecting values'

The oversupply of commercial property is reducing market values with investors being affected indirectly by the financial crisis, according to an expert.

Jason Butler, a partner at Bloomsbury Financial Planning, says the saturation of shops, offices and factories means there is less demand for commercial property, forcing values down.

He adds that the financial crisis is having an indirect impact on investors due to traders and proprietors both struggling with lower consumer demand.

"[With] a lot of these high street retailers that have gone bang, you may not be directly invested in them but you are seeing the impact of very high rents, high rates and other squeezes which mean that you are starting to see empty shops," asserts Mr Butler.

The Royal Institution for Chartered Surveyors reported in December last year that commercial property capital values could fall by a quarter over the next two years, with a 16 per cent drop in 2009.

30 Jan 2009