Opportunities in commercial property remains strong despite concerns regarding the credit crunch, according to professional services firm, Deloitte.

The Deloitte 2008 Real Estate Capital Markets Industry Outlook report indicates that in these uncertain economic times, commercial property globally has remained strong in terms of performance and stability.

Lead partner of Deloitte’s Real Estate Group in Australia, Ian Breedon, said commercial property rental fundamentals appear to remain encouraging. Mr Breedon said "In Australia, there may be opportunities to build across the various classes of commercial property.”

“The fundamentals of the Australian market continue to be strong which often is ignored in the context of the sub prime situation. Even in the US, while the residential market has taken a beating, the Deloitte US report indicates commercial property continues to be a worthwhile investment both in terms of performance and stability.”

The report provides an insight into where the commercial property market is heading globally. It also reviews critical issues, core fundamentals and underlying factors.

Mr Breedon said Australian investors with lasrge cash reserves can pick up some great opportunities locally and in the US, Asia and Europe. However, the focus on the fundamentals is critical.

“Returns will be lower compared with recent years. But, when compared to other investment categories, commercial property continues to be an attractive investment due to its stability and opportunity for diversification,” Mr Breedon said.

Deloitte head of securitisation, Graham Mott, agreed that asset quality and yields are still solid.

“The challenge for investors in the second half of 2008 won’t be identifying opportunities, as much as securing debt in an environment where lenders are more cautious,” Mr Mott said.

This article was originally released by Deloitte (www.deloitte.com.au). Link to the press release is here.

Deloitte