Commercial property prices ''on the downturn'' - commercial mortgages

15 June 2007

Prices paid for shops and shopping centres have fallen by ten per cent over the past 12 months, it has been advised.

Research from Colliers CRE has found that rental yields on commercial properties have risen from 4.5 per cent to five per cent on some retail properties, with further increases forecast.

Landlords with commercial mortgages could see the value of the properties fall over the next three years as well, Capital Economics has advised, according to the Financial Times.

In view of such findings landlords are now turning to the best properties in order to secure both prestige and value, which has remained constant in such retail assets, according to Colliers.

"We are seeing a flight to quality", commented the firm''s Andrew James, according to the financial newspaper.

Figures released earlier this week by the Confederation of British Industry advised that firms remained confident that both output and demand growth will continue as 2007 progresses.