Commercial demand rebounds
Demand for commercial property rebounded in the fourth quarter of 2014 according to the Q4 RICS UK commercial market survey.
It increased for a second consecutive quarter as 21% more surveyors saw a rise in demand which is up 9% from the previous quarter.
Furthermore 20% more respondents saw a rise in foreign investment enquiries despite concern surrounding the potential relocation of UK companies after the referendum.
2016 was busiest year since 2007
The supply of property for investment purposes fell in both the office and industrial sectors but was broadly unchanged in the retail segment.
Simon Rubinsohn, chief economist at RICS, said: “The results for the Q4 survey suggest that the commercial property market is continuing to attract investor interest despite ongoing concerns about pricing in the capital and the prospects for the economy more generally.
“Meanwhile the results for the occupier market highlight the resilience of the economy in the wake of the vote to leave the EU.
“However this clearly demonstrates the demand for large warehouses to support the development of the distribution industry as consumers increasingly go online to make their purchases.”
The survey highlighted that capital value expectations remained positive across all sectors with 14% more respondents projecting values to rise over the coming quarter.
Over the next 12 months, respondents anticipated capital values increaseing across the majority of sectors led by the prime industrial market.
The lack of occupier demand has prompted landlords to increase the value of incentive packages on offer to prospective tenants.
Lack of availability continues to be problematic with a net balance of 32% of respondents reporting a further decline in leasable space during Q4 2016.