Commercial property ‘becoming a more attractive investment’

Posted 04/02/2010

Investment in commercial property is becoming increasingly popular and attractive due to the sector’s predicted recovery.

This is the view of the Royal Institution of Chartered Surveyors (Rics), which stated that investors in the UK and Europe are increasingly returning to commercial property due to promising medium-term returns.

According to the body, many feel that the bottom of the market has now been reached, particularly in Britain, where “rapid re-pricing of real estate” is occurring as a result.

Oliver Gilmartin, senior economist at Rics, therefore suggested that those buying and holding commercial real estate now are likely to see favourable yields in ten to 15 years.

He said: “If you are getting entry route yields in the region of six, seven or eight per cent for prime assets, you may well take the view that it is becoming attractively priced.”

Earlier this week, a report from the Urban Land Institute and PricewaterhouseCoopers suggested that the UK and European commercial property sector will see a recovery in 2010, although it cautioned that the process will be slow.