Two-tier property market 'may emerge'

Office design news from Morgan Lovell

Published on 20-08-2009

Following recovery in the commercial property and office interior market in the UK a two-tier sector could develop, it has been argued.

Oliver Gilmartin, senior economist at the Royal Institution of Chartered Surveyors, said that there is presently optimism in the sector that a recovery has begun, however, this is tempered by worries over the development of a two-tier market.

He commented: "Amid the improvement, however, it is important to note that a two tier market may emerge after the storm, with investors discriminating between prime and non-prime assets, a mindset sorely forgotten during the boom times."

According to the latest Jones Lang LaSalle Quarterly Property Index, capital values for commercial property - including office interior space - fell by 3.7 per cent in the second quarter of 2009 compared to an 8.2 per cent fall in the previous quarter.

Meanwhile, rents in the office interior sector have fallen by 4.8 per cent in the last three months and by 12.2 per cent in the year to date.