Commercial property will have lost nearly one-third of its value between the start of the credit crunch and the end of this year, leading industry figures have warned. Independent on Sunday
Robert Peto, chairman of DTZ UK, Robert Whitton, chairman of asset manager Rom Capital, and Robin Priest, a real estate partner at corporate adviser Deloitte, all believe that commercial property will be worth 30% less in December than it was last August.
Priest said: 'Prices are probably 20% down already, so 30% is the minimum. In fact, that would be a good result comparative to where the market is going.'
Offices and shopping centres that have tenants on short-term leases are particularly susceptible to a decline in value, Peto said. They cannot provide a guaranteed income stream for the property's owner for the next few years. He added that the 'full extent of the market problems has not been mapped in' to current valuations.
Whitton predicted that property valuations would not start to pick up until the fourth quarter of next year, saying: 'I do subscribe to the view that things will get worse before they get better – that's a fall of at least another 10%.'