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Commercial property 'suffers downturn'
2008-08-04
Trading in European commercial property has dropped to a five-year low, new analysis suggests.
According to Cushman & Wakefield, a property consultancy, overall volumes fell to £20.2 billion over the first half of 2008 - a 63 per cent drop over 2007.
However, there was better news for buy to let entrepreneurs who deal in commercial property, with average prime yields rising 0.16 per cent to hit 6.5 per cent.
Michael Rhyddecrh at Cushman & Wakefield blamed the ongoing credit crunch for the drop, pointing out that the mortgage market constriction and general financial uncertainty among firms had put downwards pressure on the sector.
"Deal volumes have slowed not so much because of a shortage of demand or supply but because of the sheer uncertainty over financing and hence pricing," Reuters reports him as saying.
Cushman & Wakefield also pointed out that commercial property at bargain prices could now be bought by buy to let entrepreneurs as a result of the downturn.
Property price corrections were found to be most marked in Norway and Spain, as well as the UK.
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