Retail sales fall in October - commercial mortgages

31 October 2006

Investors with commercial mortgages could be affected by a fall in retail sales during October, although retailers remain confident, the Confederation of British Industry (CBI) reports.

The survey conducted by the CBI reveals that while 38 per cent of retailers claiming that they had recorded higher sales in October than in 2005, 42 per cent said their volume of sales had fallen.

John Longworth, chairman of the DTS Panel at the CBI and executive director of Asda, suggests that the results are "disappointing", particularly following more positive predictions made last month.

"It remains to be seen whether this is a return to the tough conditions seen during 2005 and early 2006, or simply a dip in an otherwise upward trend," he comments.

"We will have to wait for November's figures to see if the warmer, wetter weather we're experiencing puts the Christmas build up on hold and if the widely anticipated interest rate rise materialises and dampens festivities and retailers' sales."

According to the latest economic brief published by the Royal Institution of Chartered Surveyors (Rics), investors in the retail sector, including those with commercial mortgages, found that rents have demonstrated "moderate" increases.

However, Rics states that when inflation is taken into consideration, rents have fallen over the last year.