2008 is going to be a challenging year for most businesses in light of the “Credit Crunch” in the US and the supposed knock on effect it has had on the UK.  Commentators in the Press have been quick to predict the decline of UK commercial property for the same reasons.

The reality in the market is different.  The market is not terminally affected by the perceived funding or liquidity shortage from the banks, there is still an enormous amount of Asian and Chinese investment capital waiting for the right time to pounce.

  To the world at large, the UK property market is still regarded as a stable investment arena, but from a UK perspective, we’ve talked ourselves into a bear market! As a consequence, UK Property Fund Managers have reacted to the investor exodus and have had no choice but to off-load properties and their poorer yielding property shares, these disposals provide the basis of national press coverage.

The picture at a local level is very different. There is steady occupier demand for good quality buildings, although occupiers are highly discerning in their choice of building construction and location. Tenants will pay the best rents but only for the most modern properties with excellent energy efficiency ratings. Not surprisingly, property funds are hanging onto these quality investments in the premium areas. So in one sense perhaps we do agree with our fellow residential agents that what matters after all is location, location, and location!