Consolidation in the food retailing and convenience store sector helped to fuel a retail property price rise of 4.5% in 2004, according to the latest market report from surveyor Christie & Co.
The annual report also stated that the rising prices and high demand meant that the market was likely to be at its peak so now would be an excellent time to sell property.
Christie & Co chairman David Rugg said that in addition to the heady prices paid by groups to acquire competitor chains, the growing number of financial investors and private equity companies, a shortage of property and a positive economic environment were also driving property prices.
The report suggested that the consolidation activity was inflating the value of c-store operators’ properties and they were trying to build up their chains as fast as possible to entice potential bidders.
Rugg also said the expected fall in house prices should not affect business values greatly.
Even if the House Price Index fell by as much as 20% - as predicted by Barclays Bank - the Christie & Co index of business values would only decrease by 8.7%, he said.