Worst is over, says expert - commercial mortgages

03 January 2008

The commercial property downturn which has occurred in the wake of the credit crunch has bottomed out and the market will see brighter times ahead, an investment advisor has said.

In news which may be of interest to those considering taking out commercial mortgages, the managing director of investment advisors Dennehy Weller, Brian Dennehy, has said the market has passed its lowest point, Citywire reports.

Mr Dennehy said: "No one rings a bell at the bottom of the market, but in the period up to Christmas the ringing wasn''t just coming from Santa''s reindeer."

He stated that property unit trust revaluations now imply six per cent rental yields on portfolios mainly comprising prime property.

In addition to this, he noted that gilts stood at 4.5 per cent, making property the better investment for ungeared asset allocating funds.

He added that continued strong overseas demand, stable occupier demand and continued (albeit slower) economic expansion all spelt positive news for the future.

The Financial Times reported this week that investment fund management companies such as New Star believe values will not fall much more than they have up to now.