British Land stated that it had considerably lowered the value of its property portfolio following interest rates hikes
Estate agent Savills and commercial landlord British Land disappointed investors on Wednesday amid a weak property market.
British Land stated that it had considerably lowered the value of its property portfolio following interest rates hikes.
Higher interest rates have necessarily had an effect on property market yields and, due to this, the value of our portfolio reduced by 12.3 per cent, it stated.
British Land stated that some of these pressures seem to be alleviating and it was attempting to create medium to long-term value. Shares in British Land dropped 6.6 per cent after the news.
In the meantime, Savills cautioned that it was facing market corrections, although told shareholders that these were going largely as expected.
The firm stated that it was making lesser sales compared to previous year, but that some prime residential markets had done well, particularly London.
In the meantime, the ending of Covid restrictions in China has boosted sentiment in the country, but this is yet to actually show in the firm’s revenue, the estate agent stated.
The first half of this year is anticipated to be materially affected by the ongoing changes in global investment markets, it stated.
Savills stated that the probabilities for how the year overall might turn out are wider than a few months ago, but it still expects the markets to start recuperating in H2 of 2023.
In the YTD, global commercial investment volumes have either come to or neared their lowest levels in several years, the estate agent stated.
Due to this, at this early stage, the range of results for the year as a whole has broadened, but our prime commercial leasing, residential, consultancy and property management businesses all continue to trade as expected, Savills said.
It said: Even though it is not possible precisely to forecast the timing of individual market recoveries, we continue to be positive that markets will begin to improve in H2 and we are seeing early indications of this in some areas.