First Prop expects rental growth

First Property Group, the commercial property fund manager, has been benefiting from acquiring properties that are expected to experience rental growth from a low 2009/2010 base. The company said it remained “vigilant” for signs of weakness in the UK market but it believed the worst had past.

The UK commercial property market had recovered significantly since its lows in early 2009 but the rate of increase in values had recently slowed.

It did not expect values to markedly reduce but did expect values would not rise significantly, if at all, over the next year or two. Banks had begun to take more positive action in foreclosing on loans and this too would suppress values, it said.

First Property comments came on the announcement of interim pre-tax profits down from £1.56m to £1.32m. Its new £106m UK commercial property fund had now acquired £54m of UK assets and a further £23.5m of property was under offer, the company said.