Simon Cooke, managing director of property at Close Investments, claimed that the current crisis surrounding UK commercial property was likely to damage the market until the turn of the decade. He claimed that the sector was facing years of pain as investor confidence had been shattered with a fall in prices and with action taken by some investment firms.
Cooke said: “Some firms have reacted in a knee-jerk way and have generated further fear which has shattered confidence, and investors will now take a negative view of property for some time. If the sector continues to act as it is now, it will hurt confidence for a long time. The faster it is re-priced the faster it will recover.”
He further claimed that property would be seriously undervalued in a few years’ time, and the long terms effects of this would not just unwind in 2008.
Cooke said: “In the Summer, the re-pricing that was expected started taking effect immediately because of the existing problems within the financial sector. We can’t blame the collapse of the banking sector for property’s problems, as the sector had become very specialist and had tried to emulate equity markets in many new vehicles.”
Mike Staight, director at Mustard Commercial Finance, said: “It is relatively quiet at the moment and I know that investment property yields are low and some second properties are not getting sold. Whether this is a short-term blip no one knows, but we live in hope that the market eases in the New Year.”
Answer ten questions to win Amazon vouchers!
get the daily news delivered to your inbox
find the latest industry jobs