View from City Road: Bradman could be the right man

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The Independent Online
The almost indecent haste of Godfrey Bradman's return to UK commercial development confirms the air of unreality in the property market. The sector has a notoriously short memory, but investors would need to be very young indeed not to recall the collapse into receivership of Rosehaugh just 12 months ago.

The fact that the drift into property begun by last year's devaluation of sterling has turned into a thundering stampede is confirmed by figures from Richard Ellis, the property agent and valuer. Its total returns index, which bundles up rental income with capital appreciation, stood at 10.8 per cent at the end of October but had jumped to 15.8 per cent a month later.

In the most overheated parts of the market, such as prime retail sites, yields have fallen to below 4 per cent. At that level - barely above the income available on the average equity investment - investors are looking forward to a degree of capital appreciation that hardly squares with the current prospects for rental growth, the ultimate determinant of value.

Mr Bradman should not be written off, however. His partner in the White City shopping, housing and leisure scheme is Scottish Amicable, one of the most aggressive and astute of all the institutional property investors. ScotAm showed its deft touch yesterday by picking up a prime City office block, let at less than pounds 30 a square foot, for the same sort of yield as less canny buyers are paying for properties whose high rents will not rise for years.

If any team can navigate property's turbulent waters, this unlikely pairing may just be it.