Rossetti Place
6 Lower Byrom Street
M3 4AP

t: 0161 839 4809
f: 0161 839 4357

Development Overview

The lack of finance for development schemes means that only those with institutional backing are likely to proceed. The lack of finance for property investment means that only those with substantial cash to complement any loans will be able to operate in the market. The fact that values are probably falling is an incentive and it will certainly help to maintain a market of sorts, but commercial property is an area for those who absolutely have to occupy or for those investors with real knowledge. We need hardly add that any foray into the market should not be undertaken without the best of advice.

Given that commercial property values are still declining, at least for secondary and tertiary units, the onus is very much on the income/rental to provide the return for investors. Given also that this position is likely to continue or, at best, remain static there is no capital growth for perhaps five years, the strength or otherwise of the income stream becomes utterly vital in determining value. This is underscored by the continuing negative news, such as reducing lease lengths, frequently nil increase on upwards only rent reviews and rising tenant default rates, especially in the retail sector, but not confined to that.

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