Survey reveals strongest evidence yet of UK Credit Crunch effects
The strongest evidence yet that the Credit Crunch is having a negative impact on the buildings industry in the UK has been revealed in the CBI/GVA Grimley Corporate Real Estate Survey.
The survey is conducted every six months and this recent edition revealed 7% fewer firms had expanded their property portfolios over the last 6 months than in the previous 6 months. It also revealed that 20% of firms now plan to reduce their property space. A massive 48% of firms in extraction&utilities sectors said that their property holdings contracted throughout the past 6 months and 74% expect it to reduce further in the next 6 months. In the engineering sector also more firms expect to contract their property space than expand it.
The survey questioned firms on the effects of the crunch. Its report stated: “Unsurprisingly, by far the greatest impact is being felt in the financial services sector. As well as a reduced ability to borrow money and delays to projects, firms said key effects of the credit squeeze were to be seen in impacts on property disposal and acquisition.”
Only 1% of firms questioned said that the Crunch offered them opportunity to derive value from their portfolio. GVA Grimley's Director, Howard Cooke said: "The impact of the credit squeeze, while acting as a drag on the economy as a whole, is still mostly making itself felt in the financial services sector. Nevertheless, at times like these, firms in all sectors need to be thinking of ways they can manage their property better. Much can be gained by restructuring a lease, reducing your rent, or paying to break a contract. Currently, firms appear unaware that the credit squeeze presents opportunities as well as threats."