careful, page-75

Hi Whitebeach, from my perspective the following could be said about commercial UK property currently;

Assets are on the market with yields of between 6-10% (covenant, location and age being the big factors);
There is little in the way of money around so there are not many transations taking place at the moment as people have limited capital that they are willing to deploy. Also there is hard times getting any debt;
I think commercial properties in london probably have dropped 20% (some say by mid year the peak to trough will be 50%);
Secondary properties where pricing came in to meet prime properties pricing (almost) are being hardest hit;
You are seeing most funds with LTV breaches;
ICR seems to be holding up, however many believe the next leg down for property will be tenant failure and ICR losses;
If trusts/funds etc cant pay interest bills then we may see banks foreclosing & holding fire sales. At this point it hasnt occured;
I think valuations are running behind and you will see further value loss at June;

On the more positive side

You are starting to see some deals happening, which wasnt the case during the second half of last year;
Funds out of real estate have slowed;
You are witnessing some German investors searching the UK for high value opportunities.

RE Europe

It appears that values have been holding up better over there. Or should I say they havent fallen as hard or as fast as the UK. Why?
Some countries it is because they used less debt than us, however some have some wierd blind faith that this whole crisis in property wont effect them. (Nordics are quite in this basket, however they seem to be coming around)
There are a few real basket case stories coming in though, i.e Resi in Spain (ouch), Retail in Spain, Italian commercial in general, secondary property in France.
Generally yields have softened across the board.
You are seeing companies selling down assets in an effort to improve debt covenants (where prudent).

The only really forced sale of any magnitude that I have seen, has been of Lehman real estate assets.

I think the middle east investors have taken a fair spanking too. (there problems have been compounded by the drop in oil and devaluation of property interests in their own countries).

I am sure there is allot more I could say about the property sector but I wont.

One thing I will leave you with is that there are some real bargains appearing in the UK.
With interest rates at 1%+margin (3-5%) and yields to long term government covenants at 7-9% it doesnt take a smart person to see there are some good deals to be snapped up. If I was wealthy I would definitely be looking into some of these things in the UK.