The global credit crisis continues to affect investment into the commercial properties sector. Commercial property returns over the last twelve month period are looking to be close to the worst twelve month real return on record which occurred in 1974. RICS are predicting that over the next two years things are going to get even worse with the decline in capital values far outstripping the slumps of the 70’s and 90’s.

Investors are pulling out of commercial property fast and in doing so are leaving a very much tenant driven market behind. These are unstable economic times and tenants are looking to landlords to help them out with their commercial property lease agreements. As a result landlords are offering better value inducements, incentives, lettings agreements and rents than ever before in order to ensure their buildings do not become empty.

Despite the huge downturn in commercial property investment there are still some areas within the commercial real estate sector that are deemed viable investments. Student accommodation investors are still hoping for a successful new year and are counting on the fact that in times of recession many people put off entering an uninviting job market that is often only looking for experienced employees and look instead to improve their long-term professional prospects through training, qualifications and academic achievement. This combined with the fact that there is a shortfall in modern halls of residence and you get a potentially great investment formula in spite of the recession. Many commercial buildings are emptying fast, already standing vacant or are nowhere near full occupancy however, this formula is likely to mean that any commercial property investment into student accommodation is likely to see almost full occupancy even if some of the students drop out, which inevitably happens every year with a small percentage.