Commercial Property will take 15 years to regain lost value

According to research published by BNP Paribas Real Estate it will take more than 15 years for commercial property to regain the value lost since the market peaked in 2007.

With the exception of prime property in central London, capital values are not expected to increase because of low demand until at least 2012. The banks are reluctant to fund property deals and are striving to reduce real estate exposure as part of their deleveraging actions. Recently in the news was the intention of RBS to sell £3bn of non-core property loans and perhaps this is an indication that banks are now grasping the nettle of evaluating their loan books with more purpose.

Those investors who have been buying UK commercial property over the last year may find the outlook less encouraging than their expectations.