Returns remain solid until 2007

property

rental growth is set to be subdued but commercial sites offer potential rise of 8% per year

Morley Fund Management is forecasting returns of about 8% per year until the end of 2007 for the commercial property sector, even though rental growth is expected to be subdued. The group anticipates the best returns will come from the retail warehouse and industrial sectors, each forecasting 9.5% per year over the next three years. In terms of the impact of rising interest rates on the market, Gerardine Davies, manager of the £643m Norwich Property trust, noted bank debt now accounts for about 13% of total bank borrowing secured against commercial property. She said: "In previous hig...