Home Business News Number of vacant shops rises in the South West

Number of vacant shops rises in the South West

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The retail sector continues to weaken as occupier and investor interest drops, according to the quarter four 2017 RICS UK commercial market survey.
The survey revealed that industrial property is the clear outperformer in the UK Commercial market as retail continues to lag significantly.
In the South West retail sector in Q4 2017, 14 per cent more respondents reported a rise in occupier demand from prospective tenants.
Against this backdrop, rents are expected to decline for retail space in the near term, while 12 month rental expectations are flat across the sector.
Headline occupier demand for UK commercial property was flat in Q4, said the report, but rising industrial demand is balancing out demand for offices and declining tenant interest in the retail sector.
In the South West, 31 per cent more respondents have seen an increase in occupier demand for industrial space in Q4. As industrial continues to outperform, the near-term rental growth in that sector remains very positive.

There are self-contained shops available to rent in Tiverton, Mid Devon
Looking further ahead over the next 12 months both prime and secondary industrial rents are predicted to rise, while prime office rents are also expected to see solid gains and the outlook for secondary offices remains flat.
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South West rental growth is predicted to be positive across most areas. As in previous quarters.
Moving to the investment side of the market, 19 per cent more respondents in the South West cited an increase in enquiries from investors in Q4, which is the sixth successive quarterly rise.
Interest from overseas buyers also continued to rise modestly in the UK but with growth evenly matched across each market sector. In the face of increased interest, the supply of investable office and industrial units continued to decline in Q4.
In relation, national near term capital value expectations are positive in the office and industrial At the other end of the scale, retail capital values are now projected to decline in the near term.
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At the 12 month horizon, industrial assets once again exhibit the firmest 12 month outlook. Projections are comfortably positive in both prime and secondary office sub markets with secondary retail the only sub-market in which respondents anticipate a fall in values over the year ahead in its entirety.
RICS chief economist Simon Rubinsohn said: “The weakish tone to the Q4 survey results for the retail sector sits comfortably alongside the generally disappointing trading statements emanating from the high street in the run-up to Christmas.

Royal Institution of Chartered Surveyors chief economist Simon Rubinsohn
“The counterpart to this is the ongoing strength in demand for well-located warehouses to support the inexorable rise of the online consumer.
“Meanwhile in the office sector, the resilience of the headline rent indicator is masking the increasing attractive inducement packages required to encourage take up of space.
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“Valuations particularly in the capital’s office market continue to look stretched but overseas investors remain ready buyers for now even as domestic money seeks out opportunities elsewhere around the country.”
Source: Devon live