Brixton boss Tim Wheeler has warned that the impact of the industrial property downturn outside Greater London will be ‘forceful’.

In his statement at the company’s annual general meeting yesterday Wheeler said: ‘Secondary yields are under pressure but, with so little transactional evidence since our major sale of almost all of the remaining holdings from Industrious in May 2006, valuers will not yet be able to really market value these type of assets.

‘As a result the impact of reducing values, when it happens, is likely to be quite forceful and this is counter to the industrial investment market in and around London where there is evidence of transactions at ever keener yields, supported not least by the specific prospects of the area and the rental growth that certainly Brixton continues to be able to create.’

Brixton’s portfolio is focused on the area in and around London, where three quarters of the £2.1bn portfolio is located. ‘Greater London has the strong influence of the demand pull of the City itself as a financial powerhouse and the impending completion of Terminal 5 in March 2008, which increases the capacity of Heathrow by a further 50%, all of which fuels occupational demand,’ said Wheeler.

Outside Greater London the industrial market faces a tough time, Wheeler said: ‘There is an oversupply away from our core markets and indeed the investment appetite for such secondary locations and properties has also fallen as the most active purchasers, the bank-debt-backed property companies, have not been able to purchase given the level of yields and rising finance rates.

‘This supply imbalance and lack of market transactional evidence will lead to underperformance and potentially falling values.’