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Return on commercial property is in decline

This is the first time negative returns have been forecast since 1999 and compared with the 0.9% increase forecast from three months ago this is bad news indeed. 

Reports are now coming in that suggest commercial property is increasingly unattractive to buyers, and that has investors worried. Three months ago, a rise of 0% was predicted for property returns. Now, however, the Investment Property Forum’s consensus is predicting that the returns will actually fall in 2008 by 2.6%. The bad news for investors is that this is the first time that the survey has predicted a negative return since its inception in 1999. The census has really worried investors, however, when it forecasted that rental growth will be falling 1.1%.

According to the managers, however, this was not unexpected by investors. They believed that the optimism that was being given by a number of different analytical scientists were going to be wrong, and due to that began taking a better look at their investments.

The director of Off Plan Property, Simon Walker, however, believes that the answer to those who are worried about investing in property would do well to look to the international board. When foreign investors bring their money into another country, according to Walker, only good things happen. Once investors start seeding their money into the economy, other investors flow into the country and all investments are returned quickly.