Sunday, January 13, 2008

British property plunges as buyers for buildings vanish

Simon Packard writes:

London - LaSalle Investment Management put Condor House, a seven-storey office building facing London's St Paul's Cathedral, on the market for £130 million (R1.8 billion) six months ago.

Last month the building sold for £117 million, 10 percent below the asking price.

Appraisal values fell at a record 4 percent rate in November, increasing the cumulative 11-month decline to 7.8 percent, according to research firm Investment Property Databank (IPD). In the last property crash, values dropped 27 percent from 1989 to 1993.

"The UK market is falling apart," said Peter Hobbs, the head of research at Deutsche Bank's RREEF Real Estate. "There's a risk that this cyclical downturn turns into something worse."

Britain's £700 billion commercial property market would perform worse this year than the rest of Europe, the US and Asia, Hobbs said.

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