    |
|||
        |
|||
General
The number of commercial properties sold at auction slowed in early 2007 reconfirming a slowdown in investment across the broader commercial landscape, says RICS.
A total of 1,038 commercial properties were sold at auction in the first quarter compared to 1,402 in the last quarter of 2006. Following a 15% rise in commercial transactions during 2006, the latest figures for Q1 2007 show a slowdown in purchasing activity, with sales 26% lower than in Q4 2006.
The success rate for commercial properties sold at auction dropped to 69%, down from 73% in the previous quarter as interest rate rises reduced the outlook for returns.
The slowdown in commercial property market activity comes at a time when investors have favoured equity markets propelling the FTSE to over five year highs.
Oliver Gilmartin of RICS said: “The bull market run in commercial property is coming to an end. Fewer sales at auction reflects investor caution for commercial property, as yields have fallen below those of more liquid asset classes. Equity markets are in vogue, as optimism grows that a recovery in the Euro area and Japan will maintain global economic expansion.
Investors focusing on equity markets need to remember the lessons learned in the past year as rising interest rates in Japan and US mortgage concerns quickly raised global stock market volatility.
Reaction to Japanese monetary decisions caused ripples in global
Energy Regulations
New energy performance building regulations due next year are unlikely to go the same way as home information packs, according to Hodge Insurance Brokers (HIB) part of Julian Hodge Bank Commercial.
HIB director George Wigley is contacting property developers to remind them that all existing commercial buildings will, from next year, need to meet new rules for building design or refurbishment as part of the UK’s commitment to an EU Energy Performance of Buildings directive.
George explains, “The idea behind the new regulations – which already apply to new build – is to devise cost-effective energy solutions for all new and refurbished buildings in the UK and property owners will need to provide a certificate verifying this.
Commercial property developers will immediately think this is another version of home information packs, but it is not the case.
The certificate will detail a building’s energy performance and annual carbon emissions,” says George, “and failure to comply could mean planning permission is withheld, possibly delaying an owner’s plans to sell or lease.”
