Investment returns on the slide – nationally
Prospects for the commercial property sector are ‘bleak’ according to recent media reports.
Not meaning to worry Forum members unduly, it must be added that data on growth and returns varies widely across the country, and Bradford is still showing strong trends; but figures from the Investment Property Databank show that, not since May 1990 have investors seen such poor returns.
It is hoped – from an undeniably parochial point of view – that the monthly index produced by the IPD is skewed by a south-east led slowdown. House price indices have also shown that prices have fallen in half of England’s regions since June. Yorkshire has been exempt from that slide so far, and continues to defy that trend.
The IPD reported returns for October of -1.5%, worse than the -1.2% in September. Predicted total returns for 2007 have been revised from 8.1% in July to 1.8%. Forecasts for 2009 have also been cut from 4.3% to 0.9%.
Variances in the sector also reveal that rents continue to rise in strong occupier markets, especially in offices. The Royal Institution of Chartered Surveyors has reported that its members are increasingly pessimistic about house prices.
[All the above figures and views refer to national news reports.]