Press Release Summary: With the recent news from Knight Frank that commercial office prices have fallen in the south-east of England, many may be wondering if 2008 will bring any worthwhile prospects at all for investment in this sector
Press Release Body: With the recent news from Knight Frank that commercial office prices have fallen in the south-east of England, many may be wondering if 2008 will bring any worthwhile prospects at all for investment in this sector.
An assessment of this issue was provided by Oliver Gilmartin, an economist with the Royal Institution of Chartered Surveyors. His suggestion was that the retail and office sectors would be worse off than manufacturing, as the latter relies less on the state of the domestic economy.
Mr Gilmartin said: \"Of the three sectors, the retail market will probably come under the most pressure as consumer confidence and consumer spending eases back during 2008 while competitive pressures on the high street remain.\"
This view may be supported by the latest evidence from the high street. Retail sales figures from the British Retail Consortium (BRC) for December showed like-for-like growth of just 0.3 per cent, the weakest performance since 2004. The BRC report predicted the first half of 2008 would be \"very challenging\", while Helen Dickinson, head of retail at the report\'s compilers KPMG, said: \"This study sets the scene for the new year ahead and like-for-like sales look set to move into negative territory as they did in 2005.\"
While things look gloomy for retail, the office space sector may see a different story, Mr Gilmartin suggested, saying: \"There may be opportunities in the office market if things start to settle down especially for medium term investors as yields may start to look attractive.\"
Mr Gilmartin added that this was most likely to be the case outside the M25, where businesses were less dependent on the fortunes of global credit markets than they are in the capital. However he suggested that overall the commercial property investment market - in both its direct and indirect forms - was likely to grow as a result of interest rate cuts.
This, of course, is something many sectors of the economy are calling for, with BRC director general Kevin Hawkins one of them, advocating the unusual but in his view necessary move of a 0.5 per cent reduction. However, the minutes of its last meeting show such an action was discussed at the last monetary policy committee meeting, so even if that unusual step is not taken, another unconventional action, that of dropping the base rate in successive months, may be. If this happens, the commercial property market may just start to create new opportunities.
In today\'s world Property investment is an excellent investment option especially investment in UK
2022
