The RICS Commercial Market Survey for Q2 2014 has indicated
increasing balance in the commercial property sector, with momentum
building in various areas of the market.

Tenant demand within the occupier market remains solid, with the
industrial sector in particular exhibiting genuine strength.

Property availability seems to be contracting at the fastest
pace on record, particularly in the office and industrial sectors.
There has been a big increase in the amount of commercial property
being converted into residential housing, and this has reduced the
supply of available office space.

The value of incentive packages for tenants has also continued
to fall for the fourth successive period, with rental expectations
picking up as a result. This does indicate that rental costs may
increase in the near term.

Speculative development has increased, particularly in London,
where 71per cent of RICS members reported an increase compared to
the national figure of 38 per cent. The RICS report also
highlighted the increase in investment enquiries, which in turn is
likely to lead to an increase in the number of transactions.

The greatest demand for investment property seems to be in the
industrial and retail sectors, with the office sector lagging
behind. Investment property prices are expected to continue to grow
as a result of the improvement in activity, with investor attention
now moving towards secondary and tertiary assets.

 

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