Commercial Property: Values will decline 25 percent by 2011

According to the Royal Institution of Chartered Surveyors (RICS) the UK Commercial property market will not recover until 2011.

It’s also reported that the price of industrial properties, stores and offices will probably fall 25 percent by the end of 2010 due to the vacant properties increasing and the growth in commercial rental to slow. It this is the case RICS have said that this would drop by 50 percent from the commercial markets peak in June 2007.

The declines will be far greater than in the 1970’s and the 1990’s commercial property slump, it’s also likely that office building will be the worst hit due to the financial services continuing job cuts.

The report showed that commercial property will decline 16 percent in 2009 and a further 10 percent in 2010. However RICS have said due to improving economic conditions and lower interest rates the market should lift by 2011.

Source: Bloomberg