Demand for region’s office space grows

Demand for commercial property in the UK now stands at its highest since 1998

Demand for commercial property in the UK now stands at its highest since 1998

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Sustained demand for commercial property in the UK now stands at its highest since 1998, according to latest figures from the Royal Institution of Chartered Surveyors Commercial Market Survey.

During the first three months of the year, the North West saw a significant upturn in demand for office space, with 38 per cent more respondents seeing more prospective interest.

What is particularly encouraging is that a better tone to the results is visible in all parts of the country and increasingly in secondary as well as prime space

Since the end of 2012, demand for commercial property in the North West has risen rapidly. But the resulting tightening of the market has seen rents rise and availability fall, with 22 per cent more surveyors in the region seeing a fall in the availability of commercial space. Almost one in four expected rents to rise over the coming three months, rather than fall. As availability declines, the impact of these tighter market conditions on rental expectations has resulted in them edging upwards.

This is particularly apparent across offices and industrial space in the North West.

Simon Rubinsohn, RICS chief economist, commented: “The strength of the latest commercial property survey suggests that the underlying momentum of the economy will continue to accelerate through the course of this year.

“What is particularly encouraging is that a better tone to the results is visible in all parts of the country and increasingly in secondary as well as prime space.

“Given that these indicators have historically provided a strong steer as to the performance of the economy two to three quarters out, it is hard not to be encouraged by the conclusions.”

Will Sadler of North West-based Legat Owen said: “We are seeing a sustained and significant improvement across all market sectors, with significantly more speculative refurbishment and development.

“Rental levels are rising but incentives seem to be falling.”

Brian Ricketts of Hitchcock Wright & Partners said: “Market sentiment continues to strengthen which is hopefully a precursor to tangible improvements in rents and capital values generally.”