Some commercial firms looking to relocate but demand remains
Some 14% of Royal Institute of Chartered Surveyors members have seen evidence of commercial property firms looking to relocate from the UK, according to its latest Commercial Market Survey.
Despite that commercial property demand was broadly positive in Q3, with 12% more respondents reporting a rise in demand.
However London and Scotland were lagging behind when it comes to demand with Scotland seeing the sharpest decline with almost a quarter (24%) more chartered surveyors reporting a fall during the third quarter.
In London demand fell for the second consecutive quarter with a significant decline in demand for office space as 22% of respondents reported a drop.
RICS found that demand was being driven by the industrial sector with 27% more respondents reporting an increase for such properties. Demand across retail and office sectors remained flat whilst occupier demand rose 12% at an all-sector level, up from zero in the second quarter.
Simon Rubinsohn, RICS chief economist, said: “The negative mood in the Q2 survey reflected the fact that it was conducted in the immediate aftermath of the referendum.
“The latest results suggest that the commercial market has subsequently settled down which is broadly consistent with much of the other macro news flow that has emerged over the past few months.
“In particular the rebound in our occupier demand indicator suggests that for at least the time being, the UK economy is proving relatively resilient.
“Interestingly, the feedback we have received was noticeably more cautious in Scotland and parts of London but despite this, the RICS results do suggest that the drop in the pound is encouraging foreign investors to show interest in the market particularly in the capital.”
Rents meanwhilse improved to a net balance of +13% in the third quarter – up from -7% in the previous quarter in Q2.