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North West businesses
face further rental increases over next 12 months
BUSINESSES in the North West are
predicted to face further financial pressures, with commercial rents
expected to rise by 4% on average over the next 12 months, RICS (Royal
Institution of Chartered Surveyors) warned.
The quarterly RICS UK Commercial Market Survey (Q3 2015) reveals that North
West businesses, within the office and industrial sectors, are likely to
experience the most significant rental increases over the next 12 months, at
around 4.3% and 4.6% respectively, with London being the worst hit region
(6%).
A lack of available leasehold commercial space in the North West combined
with rising demand for such property is placing upward pressure on rents.
Demand for commercial properties in the North West; from both renters and
investors; rose during the ⅓ quarter of the year (Q3), with 32% of
respondents reporting a rise in demand for retail space (up from 28% during
Q2), whilst 61% saw an increase in demand for offices (up from 40% in Q2).
Demand for industrial properties also rose considerably, with 61% of
respondents reporting a rise in demand; up from 46% during the previous
quarter.
Consequently, commercial property values are expected to continue to rise
relatively strongly over the next 12 months.
A busier month after a very quiet summer. The level of enquiries has
increased. The main issue is now lack of stock.
Mike Redshaw, FRICS of Nolan Redshaw said:- "After a strong first
quarter, the general market seems to have plateaued, however investment
activity is increasing. The continued success of the Logistics Northsite in
Greater Manchester is restoring confidence in the commercial market and
mirrors the increase in activity within the logistics sector nationally."
Sarah Lewisbriggs of AMCAT UK Ltd in Whitehaven said:- "The market in
Whitehaven has been depressed for years, but has been positively affected by
the nuclear sector in the past 5 to 10 years. This effect is likely to
continue over the next 5 to 10 years, with the development of the new
nuclear plant. Whitehaven is likely to feel the main benefits from this,
although there could be spin off residential market benefits in other Towns
in the borough, as well as for Towns in neighbouring boroughs such as South
Lakes and Allerdale as a lot of the nuclear workers may choose to live
within the Lake District National Park area rather than the coastal areas."
RICS Chief Economist, Simon Rubinsohn said:- "While for individual
businesses, the rise in rental values might not be particularly welcome, as
a bellwether for the UK economy, the survey highlights some very reassuring
growth patterns. Nationwide, we're seeing a solid increase in demand for
commercial properties across retail, office and industrial sectors. In other
words, at the moment, however badly rental costs might pinch, they do not
appear a barrier to growth." |
