Office interior value risk in second half of 2010

Office design news from Morgan Lovell

Published on 07-01-2010

Commercial property values across the UK could be in danger of falling during the second half of 2010, one sector expert has warned.

Kelvin Davidson, property economist at Capital Economics, said the risk is that as long as the present "mini boom" in modern office design space continues, the months following this upsurge could be very severe indeed for commercial property prices.

He noted the longer there is a false perception of the market, the greater the chances that property will be overvalued and the market sent plunging by 2011.

Mr Davidson commented: "Our view for the average city rent is that there will be further falls this year and the same for the West End too. Of course, within that you can have prime going up a bit and secondary going down."

According to the Investment Property Databank Monthly Index, capital growth in Britain's commercial property market increased by 2.4 per cent in November 2009. This is the largest monthly rise in 15 years.

Capital growth over the course of 2009 totalled minus 8.4 per cent.

Posted by Paul Kelly.