Member Article

North East commercial property market continues to struggle

Demand for retail premises in the North East has lagged behind availability during the first three months of 2012, with a continued drop in rental expectations.

The latest RICS UK Commercial Market Survey shows that interest from potential tenants of retail space remained flat in the three months to March.

A net balance of 5% more respondents reported reduced demand, this contrasted with 24% reporting increasing availability of unoccupied floor space.

20% more surveyors predicted falls rather than rises in rental values over the coming three months, as all other regions as reported a negative outlook.

RICS North East spokesperson, Kevan Carrick of JK Property Consultants LLP says: “The retail property sector continued to suffer in the early part of the year with falling demand resulting in the continuing negative outlook for future rental values and activity.

“With the government’s response to the Portas Review having been announced last week, it remains to be seen what impact this will have on the high street and the retail sector as a whole.

“Across many parts of the country, it seems that the commercial property sector in general is continuing to struggle, with a lack of affordable finance proving a big barrier to growth.”

New development starts showed a net balance of -3%, as this indicator has remained in negative territory since the onset of the credit crunch in mid 2007.

Elsewhere, general availability of commercial space in the North East was positive during the first quarter of the year, as 11% more surveyors reported increases rather than decreases in available floor space.

This is the lowest reading since the final quarter of 2010, and according to RICS, reflects the ongoing weakening trend in new developments.

This was posted in Bdaily's Members' News section by Tom Keighley .