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Commercial property growth being hampered by rental market

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October saw the commercial property market grow for the third month in a row, according to yet more positive research into the sector.

Investment Property Databank (IPD) found a 1.9% growth in the market over the last month, making the total growth since August 3.2%, according to IPD’s Monthly Index report.

Malcolm Hunt, Head of UK Client Services, added: “While there has been appreciation across the three main property sectors, capital growth in the retail sector has been the driving force, gaining 2.6% in September.

“This is the second largest monthly figure in IPD’s 22-year-old Monthly Index Databank and the largest since December 1993. The sector’s growth is driven by notable investor appetite for retail warehouses.”

But, as is common with modern optimistic news on the UK’s economy, there are still factors halting a full recovery.

Vacancy rates, measured as a percentage of the Databank’s rental income supposing all properties are fully let, has reached a record high for the second time in recent months, at 12.6%, largely due to vacant office buildings.

“As long as the negative rental cycle persists so too will the concern that the upward trend in capital values could be broken,” added Mr. Hunt.

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Written by Andrew Hodges

November 26, 2009 at 10:17 pm

Posted in Comment, LinkedIn

Tagged with , ,

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