Insurance News Archive

Property owners brace themselves as RBS slows investment in commercial property

RBS has warned it is to pull back on its exposure to the commercial property market, affecting those who have taken out commercial property insurance.

The bank has stated it will be reducing its exposure to new commercial property investment. This is down to the fact RBS' troubled property had increased by 15 per cent in the second quarter of this year.

"Liquidity in the market remains tight and so the group's focus remains on refinancing and supporting the existing client base," RBS said in a statement.

The total value of its commercial property investment loans was down from £50 billion at the end of last year to £46.9 billion in June of this year. Most of the assets which were offloaded by the bank during that time were located in the UK, pointing to more troubled times ahead for the sector.

This is despite London property remaining reasonably steady in the second quarter of this year. Overseas interest in prime office and commercial space is still strong, an example being the skyscraper office building going ahead in Canary Wharf.

Posted by Michael Brown

10 Aug 2011