Time to get into prime property, says DTZ
DTZ says the worst of the commercial property slump is over and expects to see a return to growth in invested stock value this year, up 5% globally and up 8% for the UK as capital values continue to recover.
The group’s global Money into Property report identifies prime City of London office space as the only “hot” market in the UK, meaning that investors in this subsector can expect excess returns, but it also classes the prime office markets in London’s West End, Cardiff, Edinburgh, Newcastle and Nottingham as “warm” locations, where investors can expect “adequate” returns.
Last year this report from DTZ said the London City office market alone across the globe offered fair value, but the group’s 2010 report says 151 of 172 markets, or 90%, around the world now represent fair value.
Tony McGough, global head of forecasting and strategy research at DTZ, said: “What a difference a year makes. This time last year we recommended investors to wait on the sidelines as almost all commercial property markets worldwide were traded at prices above their fair value. This year, following a marked repricing of the market, our research shows that there has seldom been a better time to invest in prime commercial real estate.”
