Stalling commercial property prices are prompting banks to sell distressed assets, it is claimed.
British banks and financial institutions are looking to speed up sales of distressed
commercial development assets, it is claimed.
Estate agent CB Richard Ellis has become the latest analyst to note that growth in the value of commercial property is slowing and looks like it could stall at any moment.
With this in mind, the Wall Street Journal notes that UK banks are keen to get rid of the distressed assets before this stall occurs.
However, the publication notes that this does not necessarily mean a flood of cheap
property investment opportunities, as they will be sold in an "orderly fashion".
"The scale of the deleveraging task facing the banks is huge. With their teams now in place, plus growing awareness over potential future occupier weakness, banks do have to move forward and start to make progress," Bill Hughes, managing director at Legal & General Property told the newspaper.
A study by Leicester's De Montfort University earlier this year showed that British commercial property currently accounts for some £300 billion of banking loans, with £50 billion in breach of covenant.
Posted by Lisa Fear.
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