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Commercial property investment on a high
Richard Pullen, Director of Commercial Property Consultants, Palmer Fry, reports that the demand for commercial property investment continues to be at an all time high. Despite the rise in interest rates and the probability that this will continue in the future, the demand outweighs the supply of quality properties available for sale. This results in the frequency of an informal tender process taking place amongst purchasers.
Commercial property yields have moved downwards in each of the last twelve months resulting in increases in value of good quality commercial property investments as purchasers are now having to receive less rental income for their capital investment. On a national basis the performance of this sector was out performed during 2003 by equities. However statistically there is no doubt that commercial property remains the top performing investment asset over the last three, five and ten years.
On a national basis retail property was the best performing sector of the market in 2003 reflecting strong rental growth. The office market was, on a national basis the weakest sector, caused by difficult market conditions in London, where rental values have fallen. This contrasts with the local region where this market has performed slightly differently.
The cathedral city of Winchester continues to be in demand for office occupiers. Lettings have been plentiful and there is a marked shortage of quality space available in the city, where rents are rising.
The Southampton office market continues to be overshadowed by the significant residential retail and leisure developments, which have and are being undertaken in the city. There continues to be a shortage of new quality office accommodation within the city boundaries resulting in further proliferation of out of town development. The demand for office investments within Southampton remains high.
For further information please contact Richard Pullen, Palmer Fry on tel. 023 8021 0100 or email [email protected]
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