Commercial property optimism ''returning'' - commercial mortgages

02 January 2008

Signs are emerging of a return of optimism to the commercial property market following the credit crunch, it has been reported.

Property investment fund management companies have reported that there has been a reduction in redemptions in recent weeks, with one such firm, New Star, stating that investors believe values will not fall by much more, the Financial Times reports.

The paper adds that there is greater optimism at closed-end funds and property firms, with many companies buying stocks on the basis that there have been inaccurate and unwarranted falls in the values of some properties.

Collins Stewart analyst Simon Moore told the paper: "There are definitely discrepancies in valuations by the broad-brush drop in values."

Such improvements in optimism in the market could spell better prospects for the commerical mortgages sector in the months ahead.

Feri Rating and Research has backed the UK commercial property market by saying it is still in a good state, IFAonline.co.uk reports.