Quintain chief sees worsening of credit crisis, but no 'Armageddon'

The credit crisis will get worse before it gets better, according to John Plender, CEO of UK property company Quintain. 'A fair amount of trouble is on the way,' he said, pointing to the mortgage and derivatives markets. 'There have been phenomenal injections of liquidity by the European Central Bank, the FED and the Bank of England but the cost of lending is still very high.'

Speaking at the annual conference of the British Council of Offices (BCO) in Brussels last week, Plender said the UK may well become the new weak man of Europe. 'Things don't look good in the non-food retailing sector. Covenant will be much more critical than it has been for years.'

Plender also foresees falling prices in the UK residential sector and bankruptcies among house builders. 'But I believe the adjustment in the UK will be less powerful than in the US,' he added.

At the same time, there is no shortage of capital, he pointed out. 'This is a very interesting time for people who can be creative. Big battalions of opportunity funds are out there and they will come to the market this year or next.' In response to the question whether the real estate industry would experience a hard crunch or a soft landing, Plender said the bottom was not far away. 'There will be an uncomfortable landing, but definitely not an Armageddon.'