UK commercial property sector shows little change

London remained the strongest commercial property market in the UK in June, with little change recorded across the sector as a whole.

According to the latest CBRE report, capital values dipped by 0.5 per cent last month. The industry is clearly struggling somewhat but this is a minor improvement on the previous month's decline of 0.6 per cent.

Meanwhile, returns for all property stood at zero per cent, another slight improvement on the decline of 0.1 per cent recorded in May.

Colliers International recorded a similar trend in its July 2012 Property Snapshot, which showed that secondary markets are struggling due to a “lack of finance and imbalance between buyer/seller expectations”.

Those considering buying commercial property would do well to keep an eye on trends within the sector, especially given suggestions that some properties are being misvalued. Nick Parker, senior analyst of economics and forecasting at CBRE, noted that there are opportunities to be had for the careful investor.

“There is definitely scope for some entrepreneurial investors to make a mark in the UK property market in the coming years, with yields on secondary property still extremely high amid occupier uncertainty, and theoretical borrowing rates at extreme lows.”

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