Rental values in the UK commercial property market increase
Rental values in the UK prime commercial property market rose in the third quarter of 2019.
Office and industrial rental values increased by 1.7 per cent, while values in the commercial property sector increased by 0.4 per cent overall.
Recent figures from the Royal Institution of Chartered Surveyors (RICS) showed that occupier demand for industrial property rose sharply, while the retail sector has seen a sharp drop in demand.
Investment in the commercial property sector has also increased, with a continuing rise in the demand for online shopping being cited as a key driving force.
According to RICS, prime industrial rents are expected to rise by three per cent over the next year, with one per cent growth in the secondary industrial rent sector.
In RICS’ recent UK Commercial Property Market Survey, it also stated that capital values are expected to rise in both the office and industrial sectors.
Retail rental values decline, but at a slower rate than previous quarters, with a 0.8 per cent contraction, compared to 1.1 per cent in the second quarter of the year.
Robin Honeyman, Senior Research Analyst at CBRE UK, said: “Third quarter results across the main sectors continued the trends seen in 2019 so far.
“A very slight easing of the downward pressure on retail prime rents meant all property rental growth returned to positive territory.
“However, the 0.8 per cent decrease for shops last quarter is still the third biggest fall for the sector in the last five years.”
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