Hammerson Plc Predicts Stabilization of UK Commercial Property Market

Report, published last week by Bloomberg suggests that Hammerson Plc, one of the leading European property companies that owns shares in Bishops Square and Birmingham’s Bullring in London, declared that the UK commercial property market, which has been declining for the past 2 years, is starting to recover.
Chief executive officer at Hammerson, Mr. John Richards, explained the slowing pace of UK commercial property market decline by the fact that the decrease of rental rates is slowing down. He added that in the near future the industry will see the stabilization of values; as for the prime sector of commercial property, he said, tenants are expected to be defaulting more rarely.
The information, presented by the Investment Property Databank reveals that UK commercial property values have declined by 44% since its peak in June 2007. In May 2009 the prices decreased by 1.6%, which represents the smallest fall down in the past 12 months.
In March 2009, Hammerson Plc was one of the first of largest UK property companies to announce the raising of £584 million, aimed at the avoidance of breaking bank loans’ terms. Since May 2009, the property company has sold its buildings in the major European capitals, including Paris, Berlin and London, in an effort to reduce its debt, which now stands at £2.1 billion.
In the beginning of June, Mr. Richards declared that the company has sold 75% of its shares in the Bishops Square in London. He added that the company is back to normal business functioning despite the tough economic conditions.
Also, Mr. Richards noted that commercial properties, which are either poorly located or are in bad condition, are expected to lose value, while prime properties will gain value. He is confident in the company’s future as its property portfolio is said to be at the top end of asset performance.