Published on : Tue, 12 Apr 2005 00:00GMT
by : David Parker

While the boom in UK’s housing market has long subsided, demand for commercial property in the UK, as the saying goes, 'is going through the roof.'

Currently, commercial property is hot property in the UK and is expected to offer returns of around 10.5 percent. Investment in commercial property last year fetched much better returns than equities and bonds. Little wonder then, that demand has scaled a never before height and continues to rise despite analysts’ warning about the market overheating.

The surge has continued since a month after it was reported in a survey of global property markets across the world. Most analysts see some relation between last year’s record investment of over £40 billion in the sector and the rapid rise. These were the few exceptions who predict that the trend just might continue for a few more months.

Some predict that commercial property prices could increase another 5 to 10 percent before stabilising later in the year. Some commercial properties marked an increase in value of as much as 20 percent in just three years.

A builder-developer of repute said “the constant price rise in commercial property is easy to explain and quite justified. There are ready takers for such properties. Many multinationals are opening facilities and offices here by buying or leasing property. Clearly, the UK is increasingly being seen as a great location for business.”

An almost similar pace of growth in commercial property was seen also in China and other emerging economies in Europe; there were also a few exceptions such as Germany where prices of commercial property were reported falling.