Data reveals investor confidence creeping back, but sharp fall in commercial activity in June
The total number of UK property returns is nearly back to 0% after 18 months of uninterrupted decline but new-build activity is showing no signs of picking up, according to research by auditors BDO Stoy Hayward released today.
The firm's Commercial Real Estate Review - which provides analysis and insight on movements in the commercial property industry - showed a drop in new build volumes of nearly 10% in one month from -4% in May to -13.6% in June.
However, the research also revealed a return in investor confidence, suggesting a more stable end of 2009 and start of 2010 in the commercial property market.
The data suggests that, although conditions are still challenging, the worst phase of the recession is over as prime yields now appear to be stabilising.
Solly Benaim, head of real estate and construction at BDO Stoy Hayward, said: “Our review shows that despite the surprisingly sharp fall in commercial activity in June - which could simply be down to seasonal trends - the commercial property market is showing encouraging signs of flattening out. It is particularly significant that property returns are almost back to zero, and as we head towards the autumn and 2010, we anticipate sentiment within the sector to continue to improve.
“However, until the life blood of the system - bank lending - returns to a proper level, the overall volume of transactions will continue to remain subdued,”