Demand for commercial property rises in Yorkshire and the Humber

Yorkshire and the Humber saw an increase in demand for commercial property during Q4 of 2016, according to the Q4 RICS (Royal Institution of Chartered Surveyors) UK Commercial Market Survey 2016.

Although there still remains concern surrounding the relocation of companies based in the region following the EU vote, commercial chartered surveyors in Yorkshire and the Humber reported an increase in demand for all commercial property types during Q4.

Industrial property proved the most sought after, with 32% of respondents seeing a rise in demand for such space (up from 13% in Q3), whilst 21% of respondents saw a rise in enquiries for offices (up from 5% in Q3) and 16% reported an increase in demand for retail space (up from 4% in Q3).

On the supply side; availability of commercial property fell across all sectors except for retail, where 9% of commercial chartered surveyors in Yorkshire and the Humber reported a rise in available leasable space (up from 5% in Q3).

Respondents also reported a lack of development starts in the region across all commercial property sectors.

Consequently, this rising demand compiled with a lack of available commercial property, has led to commercial chartered surveyors anticipate that rents for all commercial property types will rise over the coming 12 months.

More respondents expect rents for prime industrial space and prime offices to increase, with 59% expecting industrial rents to rise and 50% anticipating rents for offices will increase.

Barry Crux of York-based Barry Crux & Company, said: “Arranging finance is still difficult and confidence is fragile. But small shops and industrials continue to attract interest from individuals starting up businesses or expanding from a modest base.

“City and town centers are shrinking inwards under pressure from out of town retail and internet shopping. However, York and North Yorkshire’s market towns remain resilient with continued demand from leisure and catering operators.”

Simon Rubinsohn, RICS chief economist, added: “The results for the Q4 survey suggest that the commercial property market is continuing to attract investor interest despite ongoing concerns about pricing and the prospects for the economy more generally.

“The results highlight the resilience of the economy in the wake of the vote to leave the EU but also clearly demonstrate the demand for large warehouses to support the development of the distribution industry as consumers are increasingly going online to make their purchases.”

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