Values for commercial properties in the UK have fallen again in February 2013. This makes it 16 consecutive months that the sector has seen declines, according to the Investment Property Databank (IPD).
The new figures reveal that, on average, offices declined by 0.2 per cent from the previous month, with total returns having fallen by a further 0.3 per cent in the same month. Another sector which saw falls was the retail market which also saw a decline of 0.3 per cent. The IPD research is based on appraisals made from 3,427 properties across the UK; all of them being valued at £31.5 billion in total at the end of January.
Investors are currently putting their money in properties due to falling prices and smaller competitors not being able to raise enough money. However, there has been a level of trepidation due to the fluctuating market. Phil Tily, managing director at IPD, said: “There are encouraging signs in the UK property market, but sentiment is vulnerable to external shocks. Many will be waiting for the chancellor’s budget next week in the hope that it includes stimulus for regional growth, because until economic performance starts to improve outside of London, investors will continue to hesitate.”
One such company that is planning on taking advantage of the cheaper rentals is British Land which recently announced that it was going to raise £500 million in a sale in order to fund various development schemes and sales. In a statement, British Land said: “Vendors are showing an increasing realism around value access to finance, which continues to constrain many buyers.”
Analysts hope that the commercial property market sees a halt in this decline, which began in October 2011.