Small office market ''still buoyant'' - commercial mortgages

19 July 2007

The commercial property market is continuing to exhibit strong growth in some sub-sectors because of a shortage of supply, it has been suggested.

Assetz has reported that areas such as Scotland and the north of England are experiencing particularly high demand because of such shortfalls, with some developments selling in advance of completion.

Smaller firms with commercial mortgages are among those who are increasingly opting to invest within the sector, Assetz managing director Stuart Law implied.

"Small and medium-sized enterprises make up 97 per cent of the UK business population and yet their requirements are not well catered for. This new route into commercial property investment is already generating strong yields and providing a profitable route into the commercial sector for pension investors," Mr Law commented.

"In many ways, these niche sectors are several years behind the Grade A property returns and we expect an excellent performance over the next few years," he added.

The office rental market in London is experiencing especially strong growth, Land Securities advised earlier this month.