Fresh research has revealed that commercial property prices, across the UK as a whole, increased during the month of May.
The research was gathered from 3642 properties, development and investment group, Investment Property Databank (IPD) and covered all types of commercial property, from retail units, to industrial commercial property space, to office space.
IPD found that asking prices for British commercial property space in May rose by 2.3 per cent, when compared to the same month in 2010.
However, when compared with the previous month of April 2011, the rise in commercial property prices was just 0.1 per cent. The research continued that although there is growth, the rate of change from the previous month is minimal.
Phil Tily, IPD managing director for UK & Ireland, was keen to point out that this growth in asking prices is in the main, thanks to the strong central London commercial property market. ‘This [growth in capital values] was again off the back of a strong performance by properties in central London, which saw a steady increase in capital appreciation and improved level of rental value growth.’
IPD were keen to point out, that despite growth in the commercial property market being recorded, it is not time to uncork the champagne out just yet. Saying; ‘U.K. commercial property prices rose at the slowest pace in 16 months in May.’
IPD believe that this slowdown in growth is directly as a result of looming government spending cuts. ‘The U.K. government’s plans to reduce a record deficit with the biggest spending cuts since World War II may hurt economic growth in 2011 and 2012. Real-estate values are 35 percent below their peak in June 2007’, IPD said.
Despite a positive time in regards to commercial property growth during the last few months, this research illustrates that we must keep our feet firmly on the ground and be very watchful of the commercial property market over the coming months.
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