September 17, 2010
Britain’s commercial property sector prices fared poorly for the fifth consecutive month in August while occupiers have begun voicing their concern over lack of customer service.
Worries over tenant strength and investor enthusiasm has seen average property values increase by just 0.3% last month, down from 0.4% in July, according to the latest monthly index from CB Richard Ellis (CBRE).
Since the turn of the year, commercial property prices have risen a paltry 7.5%, failing to overcome the global economic downturn and alienating investors.
"This month's returns confirm the growing mood of reflection among investors," said David Wylie, head of UK Economics and Forecasting at CBRE.
"With a significant re-rating of UK property already behind us ... investors are looking for more compelling signs of recovery in occupier markets before committing further to the market."
To compound the issue, commercial occupiers have rated their level of satisfaction at below 50% on average, citing issues with service charges, consent processes and environmental issues as sources of dissatisfaction in the past 12 months.
According to the fourth Occupier Satisfaction Survey 2010, published by the Property Industry Alliance and CoreNet Global UK, occupiers across all property sectors, have ranked their overall satisfaction at 4.9 out of 10, with 1 being least satisfied and 10 being most.
Of the 163 occupiers surveyed 14% felt the relationship with their landlord had deteriorated over the last 12 months whereas only 6% felt it had improved.
With the economy still unpredictable and the fruits of government spending cuts yet to blossom, commercial landlords are being encouraged to focus on retaining existing tenants in the hope that increased investment will follow.
