According to a report from Deloitte this week, commercial property in the UK will bottom out sometime early in 2013. The report goes on to suggest values will then rise in the latter part of the year, this based on trends in the past 13 months or more.
Deloitte spokespersons also suggest their predictions may be seen as overly optimistic, but Anthony Duggan, partner and head of research at the firm, went on to clarify saying;
“We saw large downwards shifts in pricing during 2012 particularly for secondary stock. It appears these values are now getting close to a ‘mark to market’ level where investors begin to see some value and are willing to transact."
Duggan went on to point out shortages in the Grade A quality stock, pricing barriers of ‘prime’ stock and ensuing entry levels, and an emergence of investment opportunity - widening of the UK investment market. The bottom line for the real estate economy in the UK, being similar to that in the US and EU - investor confidence will be key to any recovery. Given this bottoming out aspect, it seems fairly clear Deloitte's predication make some sense.
For more information the reader should consult the original Deloitte release here, or contact:
Sue Gibson, Deloitte LLP, +44 (0) 20 7303 3156, or email her at: [email protected]