Uncertainty in commercial property market

08 July 2011

Commercial mortgage holders and other investors have mixed opinions on how the lettings market will progress over the next five years, according to one expert.

Writing for InvestmentWeek.co.uk, manager of HSBC Open Global Property Fund Guy Morrell explained that UK commercial real estate is seen in a positive manner globally.

Foreign people often get involved in this market as it is "relatively safe and transparent", he said.

At the moment, there are further positive attributes to it, such as historically low numbers of new developments, yields that are "at a significant premium" and a fairly stable income for landlords.

However, businesses that plan to expand are currently reticent about doing so and consumer confidence is dropping. Government cuts and large amount of debt in the sector may also hinder the potential of investing in this type of building, the expert explained.

Within five years, high annual returns can be expected, Mr Morrell concluded.

He had previously said in the same publication that the market will be steady throughout 2011.

Find out more on our commercial mortgages and how we can help you achieve your aims - enquire online