With the largest online commercial real estate (CRE) audience in the UK, analysis released this week from Rightmove shows demand in the market recover to pre lockdown levels. Activity on its CRE portal is 6% higher in May this year than it was in May 2019. The industry sectors performing most strongly are industrial and logistics, land and development, retail and offices.
Alex Solomon, Director of Rightmove’s CRE portal, said: “We saw an initial recovery in late March driven by email leads, and an acceleration in mid-May when there was a rapid return of telephone leads. Email leads recovering first seems logical as applicants assumed their requirements were less urgent given the end of lockdown was not in sight and viewings were impossible. However, when the Prime Minister set out a three-step “conditional” plan to begin easing lockdown restrictions on 10th May we saw phone call volumes return rapidly. Now that lead generation has returned to pre-lockdown levels, the challenge for agents and landlords is being able to respond to this uplift in leads. We saw a 40% increase in the number of phone leads that were not answered during lockdown.
“It’s good to see all sectors recovering following the dramatic fall in demand during March. The relative recovery also makes sense as we see demand for industrial leasehold properties that help service the retail warehousing sector forge ahead at the fastest rate as home delivery makes a huge contribution to the UK population during lockdown.”
William Matthews, Partner and Head of Commercial Research at Knight Frank, said: “The Covid-19 pandemic has shown just how quickly markets can change, and therefore timely, granular data is more important than ever. This analysis provides a clear indication that interest in commercial property remains intact, which we expect to only increase throughout the year.”
Charles Binks, Head of Industrial and Logistics at Knight Frank, said: “The Rightmove data echoes what we are seeing on the ground across our network. In addition to a surge in post Covid-19 short term requirements, we have started to see an increase in longer term enquiries across all size bands, with enquiry levels ahead of last year.”
The data contains some positive indicators of interest for retail and leisure property, with email enquiries having risen to levels last seen in January. Stephen Springham, head of retail research at Knight Frank, said: “To see current retail demand broadly mirroring other sub-sectors flies in the face of the general narrative of the protracted (but now accelerating) “death of the high street”. But these figures do reflect market reality – retail and leisure businesses still want to open and occupy physical space, albeit not necessarily in every location and on past terms and at historic values.”
Dan Holland, Account Manager at Rightmove, summarised the findings: “It’s encouraging to see the market insight drawn from data collected on Rightmove matches the sentiment Knight Frank observes in the market. Through engaging with other commercial property professionals, this sentiment appears to be shared by many across the country.
“Our privileged position of having the largest commercial audience in the UK has enabled us to share real time demand data with our clients. It’s been fascinating to see the variety of enquiries particularly in the office market. We’ve seen tenants seeking professional advice and existing occupiers looking for smaller space. More recently, enquiries have come through looking for larger floor plates to observe social distancing in the workplace. It will be interesting to see how requirements develop over the months ahead.”