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Growing demand indicates economic recovery
Published September 10th, 2013
Businesses across the country are slowly looking to expand by taking on more premises in which to house their operations, according to the latest RICS Commercial Market Survey.
Interest from would-be tenants of shops, offices and factories saw a rise during the run up to summer with a net balance of 15% more surveyors reporting increases in demand. While the lion’s share of this growth was seen in London, all areas of the country saw something of an uplift. Although activity is still subdued at a headline level, the results of the latest RICS report are consistent with the signs of recovery that has been visible in much other recent economic news flow.
In tandem with rising demand, the amount of available property dipped slightly which, in turn, led to expectations for future rents stabilising. Since 2008, predictions for the amount of rent business premises will generate has been very much in the doldrums so this could be a further sign that a corner is slowly being turned.
Significantly, it would also seem that the amount of newly built commercial premises is beginning to stabilise. As with rental values, the downturn saw construction levels drop considerably yet no notable falls have been evident for some time – the amount of office space built last quarter even rose.
“It has been well publicised that the commercial property sector across much of the country has been struggling since the onset of the credit crunch, “said Simon Rubinsohn, RICS Chief Economist.
“London has been something of an exception but at long last, there are some green shoots beginning to sprout in other parts of the UK. It is still early days and the rental outlook looks challenging both in some localities and some sub-sectors. However, the generally better numbers on tenant demand are an encouraging pointer to the future.” he added.