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Gradual' commercial mortgage market progress expected

Gradual' commercial mortgage market progress expected
Date: 9/23/2009

The improvement in the commercial property market is expected to be "fairly gradual" in the coming months, according to the Royal Institution of Chartered Surveyors.

Its chief economist Simon Rubinsohn said that commercial mortgage finance is still tight and there remains a weak tenant demand, although prime properties "are likely to attract most interest".

His comments followed the publication of commercial mortgage and property statistics by the Investment Property Databank.

UK commercial property capital growth apparently climbed 0.2 per cent in August - the first monthly increase in more than two years.

This figure was recorded in the week that marked the first anniversary of the collapse of investment bank Lehman Brothers, which was one of the first signs that the UK was entering a period of recession.

Mr Rubinsohn suggested that "opportunistic investors" have been showing a renewed interest in the commercial property market "for some months", with many aiming to pick up distressed properties at high yields.

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