Key trends in commercial property

Wednesday, November 10, 2010 | Posted by: Fiona Cullinan
Categories: Property & Construction | Tags: property, FT, emerging markets, video, insight, trends, Clare Hartnell, conference, commercial property

Clare Hartnell, Head of Property and Construction for Grant Thornton, gives an overview of the main themes at the recent FT Commercial Property Conference, which was lead-sponsored by Grant Thornton and held in London on 29 September 2010. Continue reading for a text summary…

She notes the growing global nature of the property sector, with a particular nod to emerging markets in India and China, and talks about the uncertainty in the UK property market, especially in the lead-up to October’s Comprehensive Spending Review. With the commercial property sector vulnerable to the whole economy, the question of a double-dip recession was also back on the agenda for many at the conference ¬ and it was a question we put to a few of the delegates (see link below).

In our Financial Times Commercial Property Conference brochure – you can download a free PDF here – Clare also adds an overview:

The game has changed. The commercial property sector has experienced a sequence of events that has led everyone in it to question their strategies and their future expectations. Bringing together the world’s leading authorities, investors and developers to thrash out a road map for the market has never been so crucial.

Grant Thornton was proud to sponsor the Financial Times Commercial Property Conference 2010, held at the Millennium Mayfair Hotel in London. It was an international affair, with delegates from South Africa, Japan and the United States flying in to have their say and contribute to this fascinating series of panel discussions.

Some of the speakers, such as the FT’s Martin Wolf, weren’t afraid to say what everyone was thinking: the Asia/Pac markets are stronger than the more developed nations, and that our growth will not return to anything like its old level. There were insightful comments on the prospect of the double dip from several panelists (see the video link below).

Among the doom and gloom, we heard several voices that have scrutinised the market to look for good news. Among them was Philip Clark of AEGON, pointing out that our banking system is no longer in panic mode; we’re in a more measured period of activity, which can only be for the good.

We were also given advice about the state of various overseas locations as potential investment areas, and new ways to source capital in a system that shies from debt. Among my own clients, I haven’t seen any finance being offered in excess of 65% loan to value. That causes problems as there is a significant equity gap to plug. Added to this, arraignment fees are increasingly being added to interest rates, making debt finance more expensive.

With all these obstacles, there is still a way forward – as the cast of innovative, strategic minds at the conference proves.

You might also find these posts useful:

* Is there going to be a double-dip recession?
* Views from the FT Commercial Property Conference floor
* How to minimise tax in a property downturn