The Gherkin's recent administration could prove to be a turning point for the commercial property industry, delegates at a joint British Property Federation and Movers & Shakers Commercial Property Breakfast heard yesterday. High profile speakers from the commercial property industry discussed how the outlook for the commercial property market is bright and how lenders' confidence is beginning to peak.
As the corporate banking sector continues to increase its loan books and non-traditional lenders such as private equity make their presence felt within the market, the last year has also seen a significant increase in the amount of overseas investment in the sector. Speakers will debate how this growing appetite for commercial property will lead to opportunities for developers, and the industry as a whole.
Delegates heard how this diversity could lead to further opportunities for speculative developments, which bank finance has traditionally avoided, and how the growing strength of the market could affect borrowers, looking at what recent events concerning the Gherkin might mean for the future.
Liz Peace, Chief Executive of the British Property Federation, said: "London is leading the pack with its recovery, but this is rippling out the regions, who can expect to see increased activity and a more competitive market as the year progresses. With lending intentions becoming more favourable, interest rate margins creeping down and LTV ratios becoming larger, we can expect to see a lot more exciting projects come to fruition."
Becky Worthington, Chief Executive Officer, Lodestone Capital, commented: "The strengthening real estate market is not only evident by lenders accelerating activity on the new lending side, but also in tackling their non-core books. One has to wonder if the timing of the recent administration of the Gherkin is taking the opportunity to see into a stronger market, replacing their historic preferred route of 'extend and pretend'."
Brendan Jarvis, Head of Barclays Real Estate, EMEA, commented: "The property industry is cyclical in nature and we're now entering a point in that cycle where confidence is returning to the market – linked to the confidence we're seeing in the macro environment. The industry is seeing an uptick in growth, particularly through an increase in occupier demand and appetite for investment, however, it's this broad based and real economic growth that will lead to a good environment for greater momentum."