Categorized | International

United Kingdom Commercial Market Has Weak Start in 2012

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The threat of a European debt crisis is clearly taking its toll on the commercial real estate market in the United Kingdom. The market has struggled thus far in 2012, with property values already dropping by two-tenths of a percentage point in January.

 

With property values down, many analysts are considering the commercial property market to be a buyers market. Whether or not buyers will take advantage, though, has yet to be seen. The decline in values in the commercial real estate market in the United Kingdom has not been limited to just one sector. Instead, the office, retail, and industrial sectors all experienced a decrease.

 

As can be expected, offices outside of London experienced greater declines than those in the city. Offices outside of London dropped by nearly a half percentage point. The weakest market thus far in 2012, though, has been the retail sector, which saw a decline greater than 0.5 percent in values and in overall returns. Because the retail sector is very much dependent on the state of the economy, it is likely that it will continue to struggle as long as the debt crisis looms overhead.

 

It is not clear as to whether or not values will improve at some point in 2012. Analysts are not incredibly optimistic about the state of the commercial real estate market in the United Kingdom due to the weakened state of the economy in Europe as a whole. Commercial real estate investors are approaching the United Kingdom market with great caution, which does not bode well for potential growth.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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