The UK commercial property markets are improving and there is finally some good news, according to Chris Moore of Colliers.
He believes that investors who bought a year ago are now in a position to flip their hotel deals for a 100 basis point yield shift.
Moore was speaking at the 2009 Annual Hotel Conference in Manchester last week. While he said there was good news he caveated his view by saying that just 16% of commercial property was a beneficiary of the improved sentiment – prime.
Sellers of secondary property were still not coming to market, he said, as the demand was so much weaker. "This is a story of haves and have-nots. The subtext is vulnerability," he added.
The "astonishing" reduction in the volume of property on the market since the summer of 2008 was caused by a lack of supply as much as a lack of demand.
The buyers of prime assets currently were cash or near cash, sometimes with plans to refinance later. They sought high calibre trophy properties, said Moore.
But there was evidence that interest in hotels below this level was returning. "Pricing must align with trading, invested capex and potential upside," he said.
The increased supply of properties on the market was as much a sign of people deciding they must simply "get on with life".