April 29, 2015
Demand for commercial property in the UK is growing close to its fastest pace since 1998. The latest RICS UK commercial market survey shows that there was a surge in investment and tenant demand in the first quarter of this year, which suggests stronger economic growth over the remainder of 2015. The UK had its 10th consecutive quarterly acceleration of demand, with 46 percent of respondents reporting greater interest. However, the availability of commercial property declined, with 38 percent of RICS’ surveyors seeing fewer properties on the market, the impact of which is higher rents. This is particularly apparent across the industrial and office sectors. Looking ahead, respondents expect the office sector to perform most strongly; with London leading the way, despite some concerns over the valuation of prime property in the capital.
Commented Simon Rubinsohn, Chief Economist (RICS): “In the investment market, enquiries also increased significantly, with 49 percent more surveyors seeing more prospective investors – continuing the trend of rising demand which began towards the end of 2012. Overseas buyer interest also picked up on the previous quarter, with 34 percent more respondents seeing more enquiries from overseas investors (17% in the previous quarter).”
He added: “The strength of the latest commercial property survey suggests that the underlying momentum of the economy will continue to accelerate through the course of this year.
“What is particularly encouraging is that a better tone to the results is visible in all parts of the country and increasingly in secondary as well as prime space. Given that these indicators have historically provided a strong steer as to the performance of the economy two to three quarters out, it is hard not to be encouraged by the conclusions of this report.”
You can Download the latest RICS UK Commercial Market Survey here.