Cheap and Cheerful
In real terms — ie, excluding the impact of retail price inflation — commercial rental values in the United Kingdom are now lower than they have been at any point in the 29-year series for which IPD, the Investment Property Databank, provides figures. What’s more, we expect to see further falls in 2010. This is despite the fact that, in real terms, the current downturn started from a much lower base than the last major rental correction in the early 1990s, and in the absence of a “rent bubble”. What is this likely to mean for property performance going forward, and can we draw any parallels between the United Kingdom and continental Europe?
By the end of June 2009, real rental values in the UK commercial property market were 15 percent lower than where they started when IPD records began in 1980. The “Real Rental Trends” ch