The global credit crisis continues to impact investment into the commercial properties sector. Commercial property returns over the last twelve month period are searching to be close to the worst twelve month real return on record which occurred in 1974. RICS are predicting that over the next two years issues are going to get even worse with the decline in capital values far outstripping the slumps of the 70′s and 90′s.
Investors are pulling out of commercial property quickly and in doing so are leaving a quite significantly tenant driven marketplace behind. These are unstable economic times and tenants are looking to landlords to assist them out with their commercial property lease agreements. As a result landlords are offering greater value inducements, incentives, lettings agreements and rents than ever prior to in order to make sure their buildings do not become empty.
Despite the enormous downturn in commercial property investment there are still some areas within the commercial real estate sector that are deemed viable investments. Student accommodation investors are still hoping for a productive new year and are counting on the reality that in times of recession many folks put off entering an uninviting job market that is often only looking for experienced employees and look instead to improve their lengthy-term professional prospects by means of training, qualifications and academic achievement. This combined with the truth that there is a shortfall in modern halls of residence and you get a potentially excellent investment formula in spite of the recession. Several commercial buildings are emptying fast, already standing vacant or are nowhere near full occupancy nevertheless, this formula is likely to mean that any commercial property investment into student accommodation is likely to see almost full occupancy even if some of the students drop out, which inevitably happens every single year with a tiny percentage.
Even though numerous commercial property investors are searching to decrease their commercial properties portfolios in the long-run the UK commercial property market is beginning to be hailed as the best value for investment in the World, according to the annual technique for review by global property fund manager La Salle Investment Management. The UK has fallen fastest and hardest across all of the global property markets and is as a result now searching like 1 of the most appealing areas for lengthy-term investment. This combined with the fact that several universities merely do not have the available funds for revamping ageing halls means that student accommodation could be a excellent commercial property investment that is likely to stay buoyant throughout the recession.