UK property is likely to enter an unprecedented triple dip through 2011, say some of the sector’s leading managers and advisers, although the 2010 outlook has been upgraded. The total return is likely to halve to 6.6% between 2010/11, with capital values falling 1.5%, respondents told the Investment Property Forum’s long-term trend Consensus Forecast
After a positive 2010 – albeit with growth heavily loaded to the first half with capital and rental value falls in the second – retail and retail warehousing would lead the sector down to -1.5% and 0.6% capital losses respectively.
Louise Ellison, research director at IPF, said: ‘The improved prospects for 2010 are generated once more by increasing capital value growth. Rental value growth forecasts remain weak at best. The forecasts for rental value growth in 2012 are positive across all sectors but not significantly, and the five-year view also remains weak.
‘Only offices and retail warehousing [show] any positivity for 2011. The later forecasts suggest these figures may improve for 2010 but the prognosis is currently negative across the main sectors until 2012.’
The research was published on the same day as Royal Institution of Chartered Surveyors (Rics) figures showing that despite a pricing surge in the last quarter of 2009, the number of distressed sellers entering the marketing was up markedly on Q3.Around a fifth of respondents said they expected to see a rise in distressed properties in 2010, although this was dwarfed by the US and Japan, where the figure was closer to three in four.
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New York Times