Commercial property environment 'challenging'
There must be some way out of here
Tuesday, 19, Aug 2008 10:52
The commercial property environment in the UK remains "challenging" as a result of a slowdown on global economies and liquidity constraints caused by the credit crunch.
That is the view of industrial real estate specialist Brixton.
Announcing its half year results today, the organisation confirmed a pre-tax loss of £236.7m - compared with a profit of £191.7m in the previous year.
Investment profit fell 3.9 per cent to £22.3m, but rental income rose 13.5 per cent to £39.4m.
Brixton also saw rental growth increase by nearly four per cent in the first half of 2008.
"As we anticipated, the commercial property market has become more challenging in response to the credit crunch and slowing economies," commented Tim Wheeler, Brixton chief executive.
"There is confusion - and an element of denial - over direct property pricing due to lack of transactions."
Brixton rents industrial and warehouse property to clients in the UK, largely in the south-east of England and specifically around Heathrow airport.
"Brixton has an advantage and a resilience given the focus of our portfolio, finances and human resources and potential near term distress should bring opportunities in our specialist sector," added Mr Wheeler.
The company also holds little hope for the immediate future, choosing to illustrate print copies of its half year results with a picture of the four horsemen of the apocalypse and quoting Bob Dylan.
"The apocalyptic opening lines of Bob Dylan's 'All Along the Watchtower' seem to capture the beleaguered mindset of the UK commercial real estate market," explained Brixton, before adding:
There must be some way out of here
Said the joker to the thief
There's too much confusion
I can't get no relief
Businessmen they drink my wine
Ploughmen dig my earth
None of them along the line
Know what any of it is worth
Shares in the organisation fell 5.55 per cent following the news, to 234 pence per share.
Chris O'Toole