Demand for commercial property “subdued” and could hit rents, says Land Securities
Land Securities' chief executive has warned today that occupier demand for commercial property is likely to be "subdued" – and that rental values could be hit as a results.
CEO Rob Noel released a statement ahead of Land Securities' annual general meeting today saying the company expects uncertainty to continue while the UK negotiates its Brexit deal, a process which "may take some time."
Read more: Investors are getting cold feet about UK commercial property since Brexit
Commercial property is now facing a drop in investor demand; several property funds suspended trading earlier this month because investors were withdrawing too much cash.
A survey from the Royal Institute of Chartered Surveyors has found that many in the industry – especially in London – feel the sector is on the edge of a downturn. Some commentators have warned that rental rates in London could be freezed.
In hit statement, Noel said: "We expect business uncertainty to persist until there is more clarity on both the timing and terms of the UK's exit from the EU.
Read more: Commercial property rents in London face freeze
"Demand from occupiers is likely to be sudued until confidence returns and this may have an impact on rental values.
"Land Securities' portfolio of quality office properties and retail destinations, together with our very low leverage, high levels of occupancy and long lease terms by historical standards, put us in an excellent position."