Bank lending for commercial property ‘will be limited’

Posted 05/01/2010

Commercial property firm Jones Lang LaSalle has predicted that bank lending for property ventures is likely to remain limited in the near future.

The company has published its first lenders’ expectation report, which suggests that only 12 per cent of banks are currently willing to lend more than £100 million against commercial property, reports the Telegraph.

According to the firm, this is attributable to the amount of debt which still exists in the sector, as well as the falling value of offices and shops.

Jones Lang LaSalle therefore predicted that the commercial property sector is likely to see any signs of recovery constrained in the near future.

Andrew Hawkins, director of Jones Lang LaSalle’s City investment team, said: “Assuming current levels of demand, product scarcity will persist, maintaining downward pressure on yields.”

This comes after the British Property Federation last month stated that recovery of the commercial property sector to past levels will be a slow process.