Colliers Reports Improvements on UK Commercial Property Market

Colliers CRE – a leading British property consultant – published a report revealing that the UK commercial property market has seen the fastest recovery of property values in the past months.
According to the Colliers CRE report, commercial property prices are very likely to compensate for the declines seen in the first 6 months of 2009 as the increased demand of UK property investors, coupled by low property supply, bring property values back on the pre-recession level. Colliers experts, however, are concerned with the possibility of another price correction, which might occur as a result of the property rally.
Results of Colliers CRE research made the company change its forecast for UK commercial property prices to +0.4% gain; earlier this year Colliers forecasted -7.3% gain in house prices.
According to the estimates of another property consultancy – CB Richard Ellis – in October alone UK commercial property values registered a 2% growth with total returns rose by 2.7%, marking 4th consecutive month of increases.
Although it is clear that commercial property prices are still far below the level of 2007, they have experienced the most unprecedented rise in such a short period of time. Head of valuations department at Colliers, Mr. Russell Francis, is determined that the pace at which commercial property values recovered is remarkable.
The future of property values is still uncertain, though. Experts are worried that the property bubble, which has been created recently by shortage of property supply and increased demand, might burst should the situation on the property market change. In case more properties are put on sale, another wave of price correction is likely to arrive. The £135 billion of mortgage debt might soon result in sales from banks and homeowners, and, consequently, in another decline in property values.