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Published on: 10/4/2008
Last Visited: 10/4/2008
Nick Axford, head of European research at CB Richard Ellis (CBRE), said forced sales of commercial property had been limited to date but were set to pick up before the year was out."It is likely that we are going to see more products coming to the market where people really do need to find a buyer by the end of the year," Axford said.Any forced adjustment would be painful as investor losses were realised but also had the potential to re-energise flagging trade.The amount of European commercial property bought and sold in the first half of 2008 - at 66.5bn euros â€" was almost half what it was in the same period of 2007, according to CBRE."It (forced sales) could push prices down further but equally it could have the impact of bringing some buyers into the market," Axford said.CBRE said around 250bn euros was potentially available for investment in European real estate from various sources, including sovereign wealth funds, pension funds, and real estate investment trusts (REITs)."The positive thing is that there are lots of different investors out there with lots of different strategies and intentions, which means that anything that comes to the market would see more interest," he said.Much of the property currently on the market was of insufficient quality or being offered at too high a price to attract buyers, many of whom sensed that the downturn had yet to run its course and that forced sales were a matter of time."A lot of the equity we have identified is just going to sit there until the situation becomes clearer," he said.Britain has led a commercial property downturn in the wake of a global credit crunch, with UK property valuations on average down about 22% from their peak last summer.
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Nick Axford, head of European research at CB Richard Ellis (CBRE), said forced sales of commercial property had been limited to date but were set to pick up before the year was out."It is likely that we are going to see more products coming to the market where people really do need to find a buyer by the end of the year," Axford said.Any forced adjustment would be painful as investor losses were realised but also had the potential to re-energise flagging trade.The amount of European commercial property bought and sold in the first half of 2008 - at 66.5bn euros â€" was almost half what it was in the same period of 2007, according to CBRE."It (forced sales) could push prices down further but equally it could have the impact of bringing some buyers into the market," Axford said.CBRE said around 250bn euros was potentially available for investment in European real estate from various sources, including sovereign wealth funds, pension funds, and real estate investment trusts (REITs)."The positive thing is that there are lots of different investors out there with lots of different strategies and intentions, which means that anything that comes to the market would see more interest," he said.Much of the property currently on the market was of insufficient quality or being offered at too high a price to attract buyers, many of whom sensed that the downturn had yet to run its course and that forced sales were a matter of time."A lot of the equity we have identified is just going to sit there until the situation becomes clearer," he said.Britain has led a commercial property downturn in the wake of a global credit crunch, with UK property valuations on average down about 22% from their peak last summer.
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