Eurozone crisis 'impacted London commercial property'
25 January 2012
Written by Jeni Browne
The sovereign debt crisis in the eurozone has impacted commercial property in London, a specialist has said.
Jones Lang LaSalle head of forecasting Andrew Burrell claimed this factor has been the main reason for any change seen in this sector in recent months.
Alterations to bank regulations have been anticipated for a long time so this is not thought to have had a "massive additional impact", he noted.
Commercial mortgage holders may agree with the expert's assessment that this issue is "on the margins" and while it may be something else for investors to be concerned about, it has been discussed and expected for a long time.
Although office space in London has been quite obviously affected by the difficulties in the eurozone, this is certainly a nationwide issue and possibly a global one, Mr Burrell pointed out.
However, the capital has a greater level of connection with larger international trends and people in property for business in this area are more outward-looking than those in different regions, he declared.
"They are serving an international market rather than a national one," the specialist asserted.
Recent data from Lloyds Banking Group's recent Business in Britain Report revealed confidence in the capital's commercial real estate sector has sunk to the lowest level seen since 2009 as a result of sweeping changes to lending regulations, faltering demand within domestic markets and the troubles in the eurozone.
Enterprises trading with export markets outside of the continent are more optimistic and have experienced more resilient custom than other organisations, the investigation discovered.
Both investors and occupants have lost some faith in the sector as a result of large-scale economic trends, which are generally those regarding Europe's prospects, Mr Burrell stated.
"The others are just things that are going on in the background" and while they may have some impact, they are not "new news", he argued.
