Improvement in Commercial Property Occupier and Investment Markets
The latest published RICS UK Survey for the Commercial Property Market quarter 3 2013 points to a further improvement in both occupier and investment markets. In the occupier market demand rose and availability fell pushing up rent expectations for the second successive quarter.
Meanwhile the commercial investment market shows that a high number of enquiries are underpinning capital value expectations at the headline level. In line with demand performance the RICS rent expectation series sustained its upward trend with the greater balance of respondents anticipating rents to increase in the coming 3 months in the commercial property market. The strengthening market has lessened the need for inducements and this has been reflected in a negative reading for this series for the first time in 6 years.
The outlook for retail property which has been particularly weak in recent surveys is now showing some improvements with both rent and capital value expectations for the quarter ahead turning positive at the national level on the back of the pickup in demand. By way of contrast industrial property continues to strengthen with increased demand and reduced availability being reported and rent expectations now positive across all four regional blocks for industrial property. Over the next 12 months rents are expected to rise by 2% in the office sector, 3.4% in the industrial sector and 0.5% in the retail sector. On the same basis values are anticipated to rise 1.4% in retail, 2.9% in office and 3.6% in the industrial sector.