Member Article

Demand for retail space continues slide

Demand for retail space continued to fall in the last quarter, the latest RICS UK commercial market survey suggests.

In the three months to September, demand fell 18%, and interest has now fallen for five consecutive quarters.

Unoccupied floor space continued to rise, as a net balance of 20% more surveyors reported rises in availability, which resulted in a continued fall in rental expectations.

Surveyors’ expectations for future rents continued to slide, as a net balance of 11% predicted values would drop over the coming three months.

In London, fresh demand for commercial property space fell in the third quarter with negative net balance reading slipping to a two year low.

Despite this, appetite for prime office space in the capital remains firm. In the investment market, capital value expectations fell in all areas with the exception of London, as the market is underpinned by overseas investment.

Simon Rubinsohn, RICS Chief Economist: “Unsurprisingly, with the retail sector still struggling to find its feet, fewer companies looked to take on new premises last quarter and, consequentially, the amount of empty floor space continued to rise.

“This was the case in most parts of the country and it was a similar story for the commercial property sector as a whole.

“Of particular note was the downturn in demand that was seen in London. The capital has typically managed to keep its head above water better than most other parts of the country but interest from occupiers away from the prime office sector fell last quarter.”

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