A recent survey has shown businesses’ demand for commercial property in the UK has risen for the eleventh consecutive quarter, while available space fell for the ninth successive period.
The Royal Institution of Chartered Surveyors (RICS) says that as a result, rents are expected to rise at the fastest pace since its survey began in 1998.
Offices, which form the core of the market, are where rental expectations remain most buoyant. In comparison, retail continues to lag, although momentum is picking up and prices are expected to continue to rise during the next 12 months.
Meanwhile, the survey suggests availability continues to decline, adding pressure to capital values. The survey also reports greater overseas buyer interest.
Across the whole of the UK (but excluding London), 95 per cent of respondents said current commercial market valuations were either at, or below, fair value. However, in London, 50 per cent of contributors said commercial property valuations were ‘expensive’ – an increase from 45 per cent in the first quarter.
Palmers partner BJ Chong, head of Palmers’ commercial law department, said: “It is one of those words that can make the ears of a business prick up – ‘demand’.
“Most know it does not amount to an automatic green light to build and will weigh up options as they decide how to proceed. But it is still a good idea to seek expert advice. Our experience means we are well-placed to provide guidance for firms looking to develop and grow. For more information, please contact us.”