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Retail parks 'could be valuable commercial mortgage investment'

Retail parks 'could be valuable commercial mortgage investment'
Date: 12/4/2009

Retail warehouse parks, prime shopping centres and modern central London offices could prove to be attractive investments for commercial mortgage holders.

Patrick Sumner, head of property equities at Henderson Global Investors and chair of property investment information group Reita, said that these commercial sites are likely to see "pretty sharp" increases in value in the near future.

"It has already started and it is going to run for some time," he explained. "If you are a real estate company and you are geared, then obviously you are going to enhance those returns at your portfolio evaluation level."

He added that stocks are trading at 15 to 20 per cent premium to net asset value - and this suggests value increases are being priced in already.

In October, the Property Investment Perspective from Reita indicated that over 95 per cent of property experts think market conditions got better in the previous three-month period.

Some 54 per cent of respondents suggested that the improvement in property market conditions has been "significant".

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