Question-mark over property market

THE supply of property investment will increase during 2010 but it will not result in a significant increase in available stock, according to a new report from a leading property consultant.
By The Newsroom
Published 17th Jun 2010, 13:13 BST
Updated 17th Jun 2010, 13:14 BST

GVA Grimley's research, entitled Property Investment – Where's the supply going to come from?, believes that this year will see more properties entering a default scenario, but the majority of "distressed" properties will be of secondary quality, as these will have the weakest covenants and be harder to re-let.

The report noted that investor demand remains focussed towards the prime end of the market.

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Banks are more likely to sell any prime properties they hold that are distressed, as this is where values continue to see the most recovery, but such assets are less likely to be distressed than secondary/tertiary assets. As a result, the actual amount of high-quality property released will be limited.

Richard Walsh, director of capital markets at GVA Grimley's Leeds office, said: "Assets will be released in a controlled manner, in line with the considerations of individual properties, portfolios and market conditions.

"As such, this will mean a steady flow of properties entering

the market over a period of several years. But a flood of

properties entering the market through this route appears unlikely."

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