Commercial property has reached inflection point

PROPERTY

Unlike residential property, commercial property has seen 18 months of declining capital values, but the sector is finally reaching a turning point, says Michael Morris, CEO, of Picton investment trust.

There has been speculation about the potential for a housing bubble in the UK residential market and in particular the affordability of residential prices versus household earnings recently, but the UK commercial property market could not be more different. According to the Investment Property Databank (IPD), across the wider market, capital values have been falling for six consecutive quarters. Equally, since 2007, values have fallen for 14 out of 25 quarters. But this declining trend is close to reaching an inflection point. Where correctly priced and where the occupier supply/deman...