Demand for property ''exceeds expectations" - commercial mortgages

15 December 2006

Increased demand for commercial property over the past six months has exceeded earlier predictions for the market, according to a new report.

A survey of occupiers conducted by the Confederation of British Industry (CBI) and GVA Grimley reveals that 31 per cent of those questioned chose to increase their property holdings during the last six months, compared to 11 per cent who reduced them.

According to the survey, the demand from occupiers for commercial property is higher than anticipated, while predictions for next year remain optimistic.

Commenting on the trend, which may have benefited investors with commercial mortgages, Doug Godden, head of economic analysis at the CBI, said: "The commercial property sector has benefited from the recent healthy economy and continues to look forward to a buoyant half year."

While the study found that demand for manufacturing space remained at a constant level, both the retail and office sectors experienced growth, which is expected to continue into the new year.

The study follows a recent report by Savills which showed that commercial property development achieved its highest rate in eight months during November, reports Reuters.