Fletcher King optimistic despite ‘moribund’ commercial property market

Fletcher King has reported small rises in revenue and profit, but has bemoaned the “moribund” commercial property market. Chair David Fletcher said the listed firm had “started the new financial year with some encouraging instructions,” adding that he was “optimistic for the forthcoming period”. Revenue for the year rose to just over £3m from just under in 2022, while adjusted pretax profit was up from £144,000 to £165,000. But Fletcher said the firm, indeed the market, was being held back by economic uncertainty. “Looking back to my statement 12 months ago, I reported that both the letting and capital markets were considerably more buoyant than the previous year,” he said. “Regrettably that state of affairs did not continue.” Rising interest rates, stubbornly high inflation and general economic uncertainty meant that “the commercial property capital markets are currently moribund,” he said. “The potential for a change of government is further clouding investors’ vision and whilst there is a considerable volume of funds waiting to enter the commercial property market, the timing is unpredictable.” While he expected the firm’s investment department to do “much better” in the coming year, he said “the volume of their work is particularly difficult to predict under current circumstances”. Fletcher said: “It continues to be impossible to accurately predict the future of the property markets, and thus our performance, whilst current uncertainties prevail.” However, he added that he was “reasonably optimistic for the coming year”. This was in no small part due to the fact that the lettings market “in contrast to the property capital markets”, is still “reasonably active”. Fletcher added that this was predominantly in London and other big cities, and primarily for grade-A office space. He said he anticipated that the volume of valuations would continue to grow, and he expected rating appeals to do likewise. To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews