Tuesday, 12 December 2017

Property supply to rise

By Hana Vorlíčková |
Aktuálně.cz |
10 November 2008

Aside from the prices of flats and family houses, the price decline will also affect commercial properties next year.

The prices of offices, shops, warehouses and production facilities could go down by a fifth or even by a third, according to the international real estate company King Sturge.

"We expect a number of buildings and properties to come on the market next year, as the circumstances will force their owners to sell," said Dušan Šťastník, an analyst with King Sturge.

This type of situation can happen, for example, when a property owner runs out of resources to pay bank installments. Another frequent scenario is that a receiver sells buildings of a bankrupt company.

Demand for property lease and subsequently the quantity of vacant properties will influence the extent of forced sales as well.

The area of unoccupied industrial premises, warehouses, offices and shops has been growing in the past twelve months. The latest study by King Sturge showed that vacant areas in industrial and logistics centres have increased to 18%, from 9% a year ago. Unoccupied office space has risen from six to ten per cent of their total area.

The fact that bankers fear to lend large sums of money also makes the situation on the commercial property market complicated. There is a shortage of financial resources among potential buyers, which forces property owners to slowly reduce prices already now.

As a result, many developers are likely to abandon, or at least postpone the planned launch of new projects.

Forced property sales have hit several countries of the world following the mortgage crisis. The USA, Great Britain and Spain are among the worst hit.