An economic research consultancy claims that commercial property is much more appropriately priced than it was six months ago.
An economic research consultancy claims that commercial property is much more appropriately priced than it was six months ago. Ed Stansfield, Capital Economics’ property economist, said that suggestions the value of commercial property is ‘much more fairly valued’ than it used to be hold ‘a fair amount of water’.
He also claims that the current decline in the commercial property market is ‘just the start of a longer period of weakness in the economy’ which is likely to worsen over 2008 and 2009.
‘Given the high levels of space that are available, pretty much across the spectrum of the commercial property market at the moment, and a weaker occupier demand, already with high levels of available space, then I think you are looking at falling rents,’ he says.
Unlike problems caused by the investment markets, this reduction will be caused by the occupier market: with less demand for commercial property, both rents and property prices are likely to fall, he adds.