Knight Frank: Tenant quality will be more important in 2012

23 December 2011

Written by Jeni Browne

The quality of the tenants in retail, industrial and office space will become increasingly important in 2012.

This is according to Knight Frank commercial research team partner Darren Yates, who said a "flight to security" will be seen during the coming year.

People with the best commercial property mortgage deal and others with investments in this class of real estate will intend to choose good tenants and lease conditions for prime buildings in the best locations, he continued.

Conversely, small units on northern high streets, secondary business parks and any asset that is "remotely more risky" will be treated with caution, the expert predicted.

"It is all about maintaining that income stream while the wider market is more volatile," Mr Yates explained.

Risk aversion will almost be as high over the next 12 months as it was in 2009 and commercial property investors will face difficult choices in this timeframe, LaSalle Investment Management recently reported.