Bank property owners “better off than shareholders”

Premier Estates respond to figures released by the CBRE which show property investors who own office buildings occupied by banks are better off than those who own stocks and shares in the banks themselves.

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(PRWEB UK) 17 September 2012

Property investors who own office buildings occupied by banks are better off than those who own stocks and shares in the banks themselves, it has been reported.

According to figures released by property consultancy CBRE (http://www.cbre.co.uk/uk_en/news_events/news_detail?p_id=11881) this month property owners with £100 in office property in London’s premier financial district during the final quarter of 2007 will have enjoyed a rise in their investment value of £3.

However, investors in FTSE index bank shares will have suffered a drop in investment value of £56, meaning their £100 investment is now worth around £44.

CBRE’s chief EMEA economist Peter Damesick noted the difference between real bricks and mortar investment and investment in shares, saying: “As a prime real estate investor, even if your tenant goes bust and disappears you've still got an asset that has got value and which can be re-let, which is the difference with if you were a shareholder, as your entire stake would be extinguished.”

Back in September 2008 financial firm Lehman Brothers filed for bankruptcy. At the time, the firm was the fourth biggest investment bank in the US, and its collapse is widely cited as a major trigger for the ensuing global economic crisis.

When the firm collapsed, shareholders were left high and dry with no investment, but the owners of the bank’s London headquarters continued to collect rent from the group’s administrators and eventually sold the site to JP Morgan for almost £500 million.

Generally speaking, the health of the office market in the capital is linked to the financial services sectors, with changes in rent in the city staying in step with the FTSE 100 index over the past few years.

Commenting, Ben Jordan from Premier Estates said: “These figures from CBRE show that despite the wider global economic climate, property is a sound investment which can weather the worst financial storms. While rents and prices may rise and fall, hot spot areas – like the city of London – will always be popular with renters and buyers and are therefore ideal places to invest. Having experienced property management experts who deal with high-end properties every day on hand is vital and can help ensure buildings remain desirable and that the best investments are made.”

Premier Estates is a leading property management company with a nationwide portfolio of almost 15,000 properties. Visit http://www.premierestateslimited.com or call 0845 491 8899 for more information.


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