Commercial property ''focusing on prime market'' - commercial mortgages

07 August 2007

The strongest performance in the commercial property sector continues to take place in the prime pitch market, the British Retail Consortium (BRC) has advised.

Though the Royal Institution of Chartered Surveyors (Rics) reported last week that demand from businesses for commercial property was now at its highest level for seven years, rents are nonetheless softening slightly, according to the BRC.

The consortium has added that it believed demand had been sluggish, but was likely to pick up now due to fewer rent increases.

"The retail property market has been booming since…about 2002; there''s been year-on-year increases in terms of rent [before now]," commented Paul Browne, head of property at the BRC.

But this trend is being bucked in both the London office market and prime markets elsewhere in the UK.

"I certainly know that the London office market is booming at the moment through a shortage of supply," Mr Brown added.

"The only markets that are performing well are super-prime pitch: key sites in London and scattered around other regional cities," he continued.