The Commercial Property Investment Market For 2011

12 January 2011

A Better Year Than 2010?

'2010 was a mixed year for commercial property investment' reports Richard Pullen, Director of Southampton based specialist commercial property Investment consultancy Pullen Associates.   "Property values levelled out during the middle part of 2010 as the gap created between the expectations of buyers and sellers narrowed.   There are however a larger number of cash buyers in the market searching for the right type of property to invest in."

"For cash buyers with some funding, there are opportunities to buy, with yields for quality investments remaining attractive in comparison with other investment opportunities.  The limited and sporadic availability of bank funding has reduced the level of competition amongst investors from that seen a few years ago.  The downside for buyers is that there are fewer quality investments coming into the market and therefore those that are available can sell relatively quickly.  The value of these quality investments should be maintained during 2011. 

It is anticipated that 2011 may witness more properties being offered in the market as banks and receiverships seek to liquidate assets.  This was predicted for 2010, but it did not materialise.

For those sectors and areas where occupier demand is weak and where lease expiries are coming up, there is the potential for a further fall in capital values especially if rental levels also fall.   Some commentators anticipate that 2011 will be less volatile than 2010 for the property Investment market.  This will provide opportunities for sellers to offer properties in a more certain marketplace and for buyers to consider more exciting opportunities to purchase.

When considering a sale or purchase, a thorough knowledge of the market is essential as purchasers take a more forensic analysis of the quality of the investment opportunity to establish the security of income.

Richard says "that Pullen Associates is a regional consultancy, primarily covering Central Southern England, providing proactive commercial property investment advice to enable investors to maximise their returns and security of income from property investment, which has consistently outperformed other investment sectors over the past decade.'   Richard understands that every property is unique and the timing of a sale, especially for investment properties, could have a significant impact upon the sale price that can be achieved."