Markets' gloom may have silver lining; COMMERCIAL PROPERTY.
The panic gripping global stock markets could have a silver lining for the UK's sluggish commercial property market, it was suggested last night.
Real estate lawyer Jonathan Wright believes overseas investors in particular could be attracted back to the commercial property market, rather than trust their money to the volatile world of stocks and shares.
Mr Wright, an associate in the Birmingham office of global Top 15 law firm Reed Smith Richards Butler, points out that the English property market has been pulling in big investors from locations as diverse as the Middle East, Russia, Ireland and the Far East over the past few years.
"They have been attracted by the opportunities available and this country's landlord-friendly laws," said Mr Wright.
"However, other overseas players have been more cautious, particularly in the last three years, viewing a lot of stock as being over priced."
He says that there may be new influxes of cash as investors look for reliable ways to shelter from the economic storm lashing the markets.
"The big German funds are also coming back to the UK property market again, because the yields have begun to look more attractive to them," said Mr Wright.
Overall he believes that development projects will continue to get off the ground, despite the roller-coaster economic conditions.
He added: "A lot of people are talking doom and gloom, but a quick look around the property market shows that there are areas that are continuing to do very well, particularly new developments which are meeting strong local demand, and those developments which can take a longer term view."
Helping the process along is the new-found willingness of some real estate lawyers to take a more flexible approach to the way they bill their clients.
The reluctance of banks to lend on some speculative projects has forced developers, surveyors and lawyers to take a fresh look at the market, and find innovative ways to keep the real estate wheels turning.
Mr Wright says the role played by property lawyers - assisting developers and their financial backers to assess the risk attached to each proposed project, and provide solutions to any obstacles that threaten to derail them - has rarely been more crucial.
"Birmingham is very fortunate to have such a large pool of experienced property lawyers, capable of handling large complex deals," he said.
"In terms of talent it is one of the finest centres in the country, which is just as well, since any developer who is about to risk his shirt on a project needs to know that he is getting the best impartial advice available," Mr Wright added.
"Lawyers' opinions can make or break a project - sometimes the risks they highlight can be judged too great for a deal to go ahead.
"Sophisticated clients value the independent advice lawyers can give in this regard." In a number of cases lawyers rely less on traditional time keeping as the basis for invoices.
Mr Wright explained: "We are open to arrangements where we quote sensible fixed fees for the bread and butter work on the basis that we get an uplift above and beyond the hourly rate for our work at the higher end of the market."
New technology has changed the way developers expect to buy the legal services they need, says Mr Wright. Players in the commercial property world are more flexible, and move more rapidly than ever before.
"I recently acted for a client taking a new headquarters in London," said Mr Wright.
"From brief to completion the deal was done in a week and a half, and it was only towards the end of the process that I discovered the lawyer I'd been negotiating with by email had been based in Brazil for the entire period."
"There are areas that are continuing to do very well, particularly new developments which are meeting strong local demand
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|Publication:||The Birmingham Post (England)|
|Date:||Apr 4, 2008|
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