The latest quarterly report from the Royal Institute of Chartered Surveyors (‘RICS’) shows further improvement in demand across both occupier and investment markets which, coupled with a drop in supply is pushing rent expectations up for the second quarter in a row. It also noted that increased numbers of enquiries across the investment market are underpinning capital value expectations.
With the improvement in sentiment, the need for inducements has reduced for the first time in six years. The retail sector having been particularly hard hit is beginning to show some improvement on the back of increased demand and the industrial sector is continuing its positive trend.
Holloway Iliffe & Mitchell director Tom Holloway commented in this Quarter’s report:
“The south coast office market is showing signs of life under the 5,000 sq ft bracket with the industrial sector starting to see growth. However the condition, specification and location of buildings are becoming more important to occupiers.”
Craig Powell added:” There are a number of encouraging signs in the market with enquires increasing, tenants with more confidence committing to longer term leases, banks starting to finance loans for owner occupiers with a sensible deposit and lettable properties.”
The RICS report concludes that over the next twelve months, rents are expected to rise by around 2% in the office sector, 3.4% in the industrial sector and 0.5% in the retail sector. On the same basis, capital values are anticipated to rise 1.4% in retail, 2.9% in office and 3.6% in the industrial sector. Rents are expected to increase in the South East by an average of 2.3%.
