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Insolvency a 'major risk for property companies' |
Insolvency remains a real risk for companies operating in the construction and real estate sectors, according to a new report.
The industries were two of the hardest hit by the economic downturn and a study by professional services firm PricewaterhouseCoopers (PwC) suggests they are not recovering as quickly as some other sectors.
PwC's figures show that of the 4,251 company insolvencies in the UK during the first quarter of 2010, 674 were in the construction industry and 141 were real estate businesses.
Although the figures represent an improvement from the corresponding period of 2009, Barry Gilbertson, a partner in PwC's business recovery property team, said conditions remain difficult for real estate companies.
He explained the failure of tenants' businesses is likely to cause commercial property companies ongoing problems, as well as forcing down rents and increasing vacancy levels.
"This means that landlord property companies will continue to have cash flow problems," Mr Gilbertson added.
The most recent figures published by the Insolvency Service show there were a total of 4,566 liquidations and 1,465 other corporate insolvencies across England and Wales in the final quarter of 2009.
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