UK commercial property sector under severe pressure
A number of experts have stepped forward to suggest that the UK commercial property sector is under severe pressure and there is a significant risk of bankruptcies and financial problems over the next couple of years. One of the areas which have been hit is the shopping centre sector which has suffered a knock on effect from failing retail companies and falling rents.
This prediction of problems within the UK commercial property sector will come as no surprise to those who follow this particular investment market. The vast majority of companies have for some time operated with fairly high debt levels covered by rental agreements and rental income. However, the ferocity of the UK recession and the speed with which companies have fallen foul of banks has surprised many. As a consequence the margin between a healthy property company and one which is struggling is only very slim.
The problem for UK commercial property investors is the fact that so much property has been put up for sale that it will take a significant amount of time for this to work its way through the system. As a consequence, it seems highly likely that UK commercial property prices will continue to fall for some time to come and property companies will continue to struggle.
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