An overwhelming majority of real estate bosses say that current debt market conditions are having an impact on their businesses, according to a poll that has just been released by DLA Piper.
In the survey carried out with 100 chief executives and directors of property companies from around the world at the firm’s annual real estate dinner, 79 per cent of respondents said the credit crunch was influencing their work, with the largest proportion (19.78 per cent) believing it would take until the end of 2008 for normal trading conditions to resume.
Meanwhile, 12.9 per cent of those surveyed said it could take even longer – between 14 and 36 months.
DLA Piper joint global leader and Europe, Middle East and Africa group head of real estate David Taylor commented: “Prices are falling much more quickly than in previous downturns, which is good, because then they’ll start picking up more quickly. Prices have already fallen by 5-10 per cent, but they’ve got to fall by 15-20 per cent.”
Most respondents were nevertheless positive about the future of London as a prime global financial centre, with 89.6 per cent alleging that its emergence as such was likely to be sustained. Seventy one per cent said real estate investment trusts were an integral part of the investment market.
However, the majority (67.4 per cent) are already hedging their portfolios by investing outside the UK. Most of these are in the mature markets of Western Europe (71.2 per cent), followed by Asia (49.2 per cent) and the CIS (39 per cent).