It has been predicted by business-recovery experts that numbers of insolvencies in the commercial-property market will dramatically increase in 2009.
Begbies Traynor has predicted that 1,600 British property companies could go under this year alone in the onset of the recession.
It has been reported that numerous landlords have asked their shareholders to raise funds, including Land Securities and Hammerson.
Begbies Traynor has identified 304 UK property companies at severe risk of going into administration due to crippling financial difficulties, using its “Red Flag” early-warning system.
The figure is a 65% jump from 185 companies with escalating problems in the third quarter of 2008.
Nick Hood at Begbies Traynor, says: “We’re seeing a build-up of problems as the real economy in which tenants operate continues to unravel. The only upside has been the fall in interest costs. However, this offers little relief to landlords dealing with escalating tenant defaults and unprecedented difficulty in raising or preserving business funding.”
So there we have it! If you are looking for a business to buy, and reckon you can get your hands on the properties cheaply, remember that once the business has gone into administration the properties will be sold by auction.