Falling demand for commercial property
The latest RICS UK Commercial Market Survey for Q3 2010 shows falling demand for commercial property, with the office sector seeing the largest falls.
Occupier demand has fallen for the second quarter in succession, after a positive start to the year.
The survey measures sentiment from Chartered Surveyors. Demand for office space fell to -14 after growing to +19 at the start of the year.
According to the survey, concerns over the economy have resulted in a more cautious attitude from firms when making property investment decisions.
Supply in the commercial property market continues to increase, with the biggest supply increases reported in the Midlands and the North. Available space has broadly stabilised in London and the South West.
The outlook for rental growth was influenced by expectations for increased supply and weaker demand. 16% more surveyors now anticipate rents falling rather than rising over the next quarter.
Overall, there is now a mixed picture for the UK commercial property market. Caution has arrived in this sector following quite a positive start to the year.
Photo courtesy Detlef Schobert.