I am still very bearish on retail property in UK & EU. The falls measured in US retail are now -59% and are similar to the collapse in UK commercial. Today Land Securities PLC reported as follows;-
Property giant Land Securities saw its net asset value slashed by two-thirds in 2008 in what it described as ‘unprecedented market conditions.’ Basic net asset value per share slumped to 639p at the end of March 2009 from 1,862p a year earlier. The group’s property portfolio took a £4,744m dive, after sliding £1,293m the previous year. The valuation hit helped push the company deep into the red, with a pre-tax loss of £4,773m versus a pre-tax loss the year before of £988m.
Sector peer Hammerson has completed its evacuation from Germany by selling a Berlin shopping centre for €70m. The news did little to stop the share price from joining Land Securities in hurtling downwards.
& from the Daily Reckoning today;-
..."from DR today..."What mistake did California make? It increased expenses – counting on Bubble Epoque growth rates to continue. But instead of continuing to rise, property prices – which held the bubble aloft – collapsed.
Now comes word that housing prices are still going down. In fact, they went down faster than ever during the first quarter of this year – 14% year on year.
The biggest drops were not in California... but in Cape Coral/Ft. Myers, Florida, and Saginaw, Michigan. The Cape Coral area saw a staggering 59% collapse in house prices. Saginaw was not far behind; there, house prices fell 54%. "
UK retails down circa -20% has much further to fall. In fact I think it could fall another 50% reflecting my forecast of top to bottom declines of -70%. As the founder of English Heritage said to me today "Stay out of retail property, this is a 15 year downtrend."
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