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In the February 2010 Issue of Property Investor News
Secondary Commercial
The UK property market has been in one of the deepest recessions in years. Weak economic factors including rising unemployment, lack of credit and uncertainty after Dubai World, a prominent investor, requested a freeze on some $26bn of debt payments will continue to affect confidence in the commercial sector.
PIN spoke to commercial property agents to find out the score with secondary commercial property.
How has the market held up?
There is obviously less income in secondary property than prime therefore according to Andrew Wilkinson, Sanderson Weatherall's partner in investment, investors are being fairly cautious about what to buy.
He says: "This led to a damp 2008 and 2009 as much secondary stock has become unsellable. This isn't because it won't sell but due to sellers not wanting to accept lower prices on their units and make a loss. Secondary commercial property prices are also not meeting historic expectations. Many would-be sellers have taken the line that if they don't need to sell why should they."
Kelvin Davidson, commercial economist for Capital Economics, agrees, adding: "Some anecdotal evidence tells us there is no market for secondary property as there is a mismatch between the supply and demand. Sellers don't want to drop their prices and buyers want cheaper prices and this has forced more supply onto the market than there is demand. It's much the same situation as in many parts of the residential market."
Transactions are happening but it barely records on the scale when compared to previous years.
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