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A recovery this year doesn’t mean that the worst is over

SLOWLY but surely, activity is creeping back to the moribund commercial property sector.

British Land and Songbird have signed tenants at their landmark developments Drapers Gardens and the Ropemaker, while it’s only a matter of time before Minerva finds an occupant for the now-complete Walbrook.

That’s good news for adviser DTZ, which advised on Macquarie’s occupancy of the Ropemaker; yesterday it said it would swing to profit this year on the back of a recovery in some of its key markets, not least London.

Investors shouldn’t get too excited, however. This could easily be a false dawn, because it is notoriously difficult to predict the outlook for property firms following a downturn.

A profit this financial year should be welcomed, but as analysts at broker JP Morgan Cazenove point out, there is virtually no visibility for financial 2011 or 2012. That makes these shares a risky buy.
david.crow@cityam.com