Convenience and off-licence property values are expected to remain buoyant despite a slump in the commercial property market.

The US sub-prime mortgage crisis caused growth in retail property prices to slow towards the end of 2007.

However, values were still up for the year overall and the omens were good for 2008, said Tony Evans, director at property agents Christie & Co.

Average retail property values rose 5.6% in 2007only marginally less than the 5.9% growth recorded in 2006, according to the agent's average price index, which covers convenience stores, forecourts, off-licences and post offices, but not supermarkets.

"The first three weeks of the new year have shown the appetite for buying is still there," said Evans. "We are looking forward to a positive market this year."

Forecourt values recorded some of the biggest increases in the sector, he said, adding that he expected the momentum to continue. "There was huge movement in the forecourt market from traditional operators as well as convenience operators, who see forecourts as a great opportunity for development," he said. "We don't doubt ongoing interest in the sector will continue to drive forecourt property prices during 2008."

There was also a lot of activity in the off-licence sector. The level of interest in 180 Threshers stores up for sale was a good indicator of a healthy market, said Evans.

However, growth in value of c-stores with post offices had slowed as a result of the uncertainty surrounding the government's plans to shut 2,500 post offices.

"The network changes have affected the market and the post offices we are selling tend to be those whose future has been decided," said Evans.

"Although there will be an impact on a business when a post office closes, adding to the convenience offer can offset that. As the year goes on, we'll get more clarity and the market will return to normal."

Topics