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Recovery in commercial property market

Recovery in commercial property market

Category: Business

Updated: 10/12/2013
First Published: 10/12/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

A survey by Lloyds Bank has revealed growing confidence in the commercial property sector, with around 76% of SMEs and 80% of major businesses expecting increased activity in the market over the next three to six months.

The Commercial Property Confidence Monitor, a bi-annual survey of over 500 principals, advisers and fund managers in SMEs and major businesses in the property sector, indicates that a commercial property recovery is well underway with positive sentiment reaching its highest level since the research began in 2010.

In fact, some 88% of fund managers expect their assets to increase in value over the next three to six months – a figure that stood at just 10% at the same point last year – with 80% of major businesses displaying similar sentiment. Conversely, 63% of major businesses are planning on increasing their commercial investment commitments over the same period, showing a distinct turnaround in market confidence.

That same level of confidence is starting to make itself known in smaller companies too – 69% of commercial property SMEs expect their area of the industry to improve while a further 55% expect their portfolios to perform better, and 44% intend to increase their level of investment.

This means the loan books of many commercial lenders could once again start to increase, particularly as a lot of businesses are looking to boost their level of investment in the industry, with commercial mortgages being the key driver of growth and continued recovery in the sector.

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