Commercial mortgage holders see property values increase

16 December 2010

Written by Jenny Barrett

Commercial mortgage holders may have seen a rise in the value of their property, as a recent report has shown the average price of commercial real estate increased by 0.1 per cent in November.

The Investment Property Databank's (IPD) UK Monthly Index said although values were little changed during the month, with industrials slipping slightly and retails and offices making modest gains, commercial real estate prices have appreciated by 6.6 per cent in 2010.

Most of the rises in the value of the assets were made in the first six months of the year and the net effect of the capital growth added to a 6.5 per cent income return is a 13.5 per cent overall return for the year to date.

Mal Hunt, head of UK and Ireland Client Services at the IPD, commented: "Since the property market recovery first emerged in August 2009, capital values have now rallied 16 per cent ... and over the longer term, prices are level with the start of the last decade."

President of Bloomberg Daniel Doctoroff recently described Walbrook Square in London as a "prime location" for commercial real estate, as the company stated it was to purchase a site in the area.

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