As one of the biggest and most competitive markets in Europe and worldwide, the UK - particularly London - will continue to be a good place to invest, provided GDP growth is sustainable and the current high level of vacancies contracts, says Hans-Joachim Kühl, board member at German real estate asset manager Commerz Real and a speaker on the panel 'UK Commercial Property: the Investment Opportunity?'
As one of the biggest and most competitive markets in Europe and worldwide, the UK - particularly London - will continue to be a good place to invest, provided GDP growth is sustainable and the current high level of vacancies contracts, says Hans-Joachim Kühl, board member at German real estate asset manager Commerz Real and a speaker on the panel 'UK Commercial Property: the Investment Opportunity?'
He has mixed views on whether now is the right moment to invest in London, where Commerz Real was last active in September 2008 with the acquisition of an office property for €100 mln. 'You can still do something, but there are fears of a bubble driven by the abundant supply of cash and the limited supply of good product,' says Kühl, who is responsible for worldwide acquisitions and disposals. 'I think that prices and the compression on the yield side are not yet covered by rental increases so any investment is a bit of a bet on the future,’ he continues. 'People may want prices now that are quite close to the peak seen in 2004 and 2005 or even 2006, but in many cases these do not yet reflect the long-term sustainable value of the property.'
While there are some signs of rental growth in London’s West End, it is still too early to speak of a real trend, he says. In essence, property buyers in the UK capital have to operate at a micro level and compare prices and rental levels on a property-by-property basis. Outside London, where Commerz Real itself has been active recently with the acquisition of an office building in Birmingham, the UK market also offers good opportunities at present, says Kühl. 'There is basically less volatility there. It’s less sexy but at the same more stable. The upward potential is limited but so is the downside.'
Session: UK Commercial Property: the Investment Opportunity?
Speaker: Hans-Joachim Kühl, management board member, Commerz Real
When: Thusday 18 March, 15.00 - 16.00
Where: Auditorium Esterel, Level 5, Palais des Festivals