Landlord News

Commercial rents set to soar

Em Morley - July 23, 2015

The latest RICS Commercial Market Survey indicates that commercial rents will rise at the greatest rate since tracking began.

Data from the report shows that demand for commercial property rose for the eleventh successive quarter, but supply fell for the ninth month in succession.

Rises

As a result of the research, rents are widely tipped to rise at a record rate. 46% of respondents predict higher, not lower, rents moving forwards. Offices were found to be where rental yield expectations remained at their highest, with retail continuing to lag behind.[1]

In the UK as a whole but with the exception of London, 95% of people questioned said that present commercial market valuations are standing at or less than perceived fair value. This is roughly the same as in the first three months of the year.[1]

However, in the capital, 50% of respondents said that they felt that commercial property valuations were ‘expensive, representing a 5% increase from quarter one of 2015.[1]

Commercial rents set to soar

Commercial rents set to soar

Referendum

When asked about the potential of Britain leaving the European Union, 44% felt that a move would have a negative effect. 32% believed the outcome would not be detrimental whereas 24% were not sure either way.[1]

Simon Rubinsohn, Chief Economist at RICS, stated, ‘the results of the latest survey suggest the price of commercial real estate will continue to move higher over the next twelve months and quite possibly by another ten per cent.’

Mr Rubinsohn went on to say that, ‘fortunately, the strength of the occupier market is providing some underlying support for the market. Indeed, the feedback we are getting from around the country tells us that the economic expansion is continuing to broaden out with both tenant and demand and just as significantly, investor interest, rising in all areas.’[1]

[1] http://www.propertyreporter.co.uk/landlords/commercial-rents-expected-to-rise-at-fastest-rate-since-records-began.html