PROPERTY expert Atis-real is predicting a further dip in the property market, but says Sheffield isn't being hit as hard as other parts of the country.
"The impact of the current downturn hasn't been as pronounced for Sheffield as for other areas in the region as the market has remained relatively constant over the last few years," said Nick Brearley, of the company's office in the city.
"There i
s still occupier demand within the city and Sheffield hasn't to date experienced a massive oversupply.
"Although there is an estimated 800,000 sq ft of committed Grade A office space coming on to the market in the next two years, this is necessary to continue the city's regeneration plans by promoting inward investment and ensuring that the region continues to go forward.
"The investment market is still falling rapidly and buyers are waiting for the market to 'bottom out' before they start to undertake transactions again. Once this happens the volume of deals will rise, which will regenerate the local market.
"However, there are still investors who are active in the region and although the number of deals undertaken by institutions has been small, in the last year we have seen a number of private individual investors emerge. There are also a number of 'opportunity funds' that have been set up to capitalise on the current situation."
The firm predicts that shopping centres such as Mead-owhall will see a gradual fall in rental growth this year of 0.7 per cent, which will continue in 2009.
Andrew Marston, Atisreal's associate director for research, told a property seminar in Sheffield that increased interest rates, inflation and economic decline would result in a further dip in property prices.
Mr Marston predicted that the economy will perform below trend growth until 2011, slowing household expenditure still further and hitting the retail and logistics sector.
Office rents will not grow until 2012 and Yorkshire office rents will fall by 0.6 per cent by the end of 2008, and reduce by a further 2.5 per cent and 1.9 per cent in 2009 and 2010 respectively.
Retail rents are expected to begin to decline in 2009 when shoppers are likely to have felt the pinch of the credit crunch more. Atisreal is predicting a 3.4 per cent fall in rents.
READ MOREMain news indexYour letters.
FeaturesLatest sport.The full article contains 406 words and appears in Star Business newspaper.
