Commercial mortgages holders 'may see growth stall in larger companies'

02 July 2010

Written by Steve Olejnik

In news that may interest mortgage holders, one fund manager is preparing for a slowdown in the growth of the commercial property sector.

According to City Wire, Alex Ross of Premier has predicted that capital expansion in the industry will falter and conditions will worsen on the back of policies announced in the Budget.

The expert also cited the increase in capital gains tax and VAT as factors which will impact negatively on property businesses, as their tenants are put under pressure.

Mr Ross feels that smaller firms, which invest in distressed properties, are more likely to do well should growth weaken in the sector.

In contrast, Thames River Real Estate Securities Fund manager James Wilkinson has more confidence in the industry.

"Large companies like Land Securities ... have exposure to prime assets like shopping centres, which we still like, and we are positive on those stocks at current stock market valuations," he told the news provider.

This follows comments from Doug Taylor, head of economic advocacy at Which?, that the establishment of new institution metro bank will see the "sharpening up" of other providers' deals.

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