Commercial property set for a more stable 2013 | 11 February 2013
Commercial property deals could provide even greater returns in 2013, but only on some of the better deals, costar.co.uk reports.
In its latest commercial property returns report, Legal & General Property forecast an overall rise in the market, although there will be a marked difference between individual deals.
L&G’s director of research Rob Martin suggested that some of the best opportunities will see their results from 2012 improved upon throughout the coming 12 months. Those opportunities which didn’t fare so well may not quite be out of the woods yet, however, as there could still be a polarisation between the two.
Overall, the market is set to see stabilisation, following an average contraction of three per cent last year. Much of this, it is thought, will have been down to the six per cent increases forecast for income return.
Explaining the figures, Martin told postonline.co.uk that the more positive outlook for 2013 was down to three key drivers: “First, central banks look determined to boost growth and this has fed through to our economic growth forecasts which have been marked higher.
“Second, there is evidence of an easing in commercial real estate credit markets. Our third driver for optimism on future returns is the valuation case. The risk premium offered by investment in commercial real estate is comparatively attractive against historic averages.”
The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author.
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