Commercial property sector 'to be soft' in 2011

Office design news from Morgan Lovell

Published on 09-03-2011

The UK commercial property and office interior market will likely be "soft" during 2011, one industry expert has stated.

Ed Stansfield, property economist at Capital Economics, said relative uncertainty in the UK's labour market means a reduction in secondary values is likely to drag down the average for the whole sector over the coming months.

He commented: "The market is going to be extremely soft this year with fairly reasonable total returns, but nothing like the double digit figures that we saw last year. [There will be] modest falls in secondary capital values and a fairly stable prime market."

According to data compiled by CB Richard Ellis, the UK commercial property market picked up in February 2011, producing an improved total return of 0.8 per cent and capital growth of 0.3 per cent.

This represents a marginal increase on January's 0.7 per cent total return, as property yields continued to nudge downwards as a result of continued investor demand.

Posted by Ian Johnson