Firms 'looking to get in on the act' with commercial mortgages

24 August 2009

Written by Gavin Elley

As the value of some prime commercial properties begins to stabilise, some firms are looking "to get in on the act", according to the manager of the Scottish Widows Investment Partnership Property Trust.

Gerry Ferguson told Barry O'Neill of the Press and Journal that the distinction between non-prime and prime property has returned to the market, which has seen the value of so-called prime properties stabilise - "or even appreciate slightly".

He added that as much of the return from an investment in commercial property comes from rental income, long-term investors may find the current average of three to four per cent attractive.

Mr Furguson added that people considering a commercial mortgage should select a property in an area where there is "no obvious over-supply".

Last week, commercial real estate expert Michael Rhydderch of Cushman & Wakefield noted that properties that do not stand out from the crowd tend to be the worst-performing assets during times of economic downturn.

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