The U.K. commercial property market appears to be losing steam. People who care about U.S. real estate should take note.
The organization that represents U.K. real-estate appraisers said Tuesday that office-space demand in the country has fallen for the first time in a year. Tenants are fretting over the European debt crisis and the extent of government budget cuts, the Royal Institution of Chartered Surveyors said. Meanwhile, the rise in U.K. property values is slowing, growing 5.8% so far this year after an 8.6% rise in the second half of 2009.
These data points might be an ominous sign because the U.K. commercial-real-estate market in recent years has appeared to lead its American counterpart—with values falling earlier and recovering more quickly than in the U.S.
In recent months, American landlords have said they’re seeing hopeful signals, from heightened leasing activity to increased investor interest. But vacancy rates are still going up and economic headwinds like state budget cuts, sustained joblessness, and those pesky concerns over European sovereign debt are still weighing on the market. To be sure, the U.S. market is bigger and more diverse than in the U.K. But what’s worrying U.S. landlords sounds an awful lot like what’s already hitting property demand across the pond.
From: blogs.wsj.com
.jpg)