The latest Commercial Property Market Survey from the RICS for Q1, 2018 reports flat occupier demand during Q1 2018, with the headline indicator easing to zero. However, this masks significant differences across the 3 main sectors of the commercial property market, with demand for industrial/warehouse space continuing to rise solidly. In the office sector, office demand picked up, albeit marginally, for the first time since Q1 2016. However, demand for retail space further declined and at an accelerating rate and is the weakest since 2009, according to the Survey.
At the same time, the supply of retail property on the market has increased, resulting in landlords having to offer greater incentive packages to secure lettings, for the 4th consecutive quarter. In the office sector, supply has remained steady, but fallen again in the industrial/distribution sector.
In the investment market, demand rose for the seventh successive quarter, albeit at a slower rate than previously, with demand increasing strongly for industrial assets, marginally for offices and falling in the retail sector. Foreign buyer demand was flat across all sectors during Q1. The supply of property of available for investment purposes continues to decline in the industrial and office sectors, but increased in retail.
RICS Survey contributor, Andrew Kilpatrick of Kilpatrick & Co said: “Swindon’s market has seemed a little subdued at the start of 2018, largely thanks to economic uncertainty. However, good interest is reported in the speculatively built 217,000 sq ft warehouse at Symmetry Park on the new 100 acre development east of Swindon off the A420”.
