Commercial property values will hold up and not plummet as they did after the Lehman Brothers collapse of 2008 despite stock market volatility being similar to three years ago, says Invesco Real Estate.
Two reasons are liquidity and valuations.
Liquidity exists because banks are still willing to lend at reasonable rates to corporate occupiers with growth prospects and to investors with solid ‘core’ real estate. This wasn’t the case three years ago.
Meanwhile, values are still well below historic peaks across most real estate sectors in developed markets, even after the value increases experienced over the last 12 months.
Simon Mallinson, European research director at Invesco Real Estate, says:“We believe the current investment conditions are fundamentally different to those of 2008, and there is ample reason to be optimistic for next year.”
©2011 funds europe
