Huge overcapacity in the UK retail sector will bring another year of falling values and store closures Only the most optimistic of property experts could argue that 2013 is going to be anything but tough. Finance, the lifeblood of the industry, is still only available in scant amounts, values continue to fall, demand is at best flat in most markets, and investor caution as a result of the above is dampening any hope of real recovery.
Huge overcapacity in the UK retail sector will bring another year of falling values and store closures
Only the most optimistic of property experts could argue that 2013 is going to be anything but tough. Finance, the lifeblood of the industry, is still only available in scant amounts, values continue to fall, demand is at best flat in most markets, and investor caution as a result of the above is dampening any hope of real recovery.
This was the glum message to come out of the European Outlook 2013 Briefing organised by PropertyEU and hosted at law firm SJ Berwin’s London offices in November. A consistent theme, the meeting heard, was the lack of liquidity across all sectors. A new, worrying trend among funds and asset managers of ‘sitting on piles of cash’ was contributing to the inertia, said Catalyst Capital founding partner and panellist Peter Kasch. ‘There are now people who are not interested in making money,’ he said. ‘They’re interested in preserving capital, parking money. They’re not really investors, they are
wealth preservationists who will buy that prime space.’ So where is this wealth preservation leading us to?
A dangerous place, said Kasch, in which the normal rules of the free market are under threat. ‘There are a lot of companies that have been kept artificially alive by virtue of the low interest rate and therefore the natural Darwinian
clearing process that should have been going on for the last two years has not been happening,’ he said. It’s a
stark analysis, but not one without foundation.
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