UK
Commercial
Property
Monitor
Q4 2023
ECONOMICS
ECONOMICS
Occupier and investor demand still subdued although
forward-looking sentiment improves marginally
The Q4 2023 RICS UK Commercial Property Monitor results
continue to portray a market struggling for momentum,
even if most of the indicators tracked in the survey have
improved slightly (or turned less negative) relative to the
previous report. In keeping with this, although views remain
mixed, the largest share of respondents (33%) now sense the
market has reached the bottom of the current cycle, which
represents modest increase on the 24% who were of this
opinion last quarter.
Occupier Market
The all-property aggregate measure of occupier demand
posted a net balance reading of -7% in Q4. Although slightly
less negative than fi gures of -12% and -10% seen in Q3 and
Q2 respectively, the latest feedback remains consistent with a
generally subdued trend in headline tenant demand. Looking
at the sector breakdown, both the offi ce and retail segments
remain relatively weak, returning net balance readings of
-12% and -18% (albeit these are a little less downcast than
values of -19% and -25% seen beforehand). Meanwhile,
industrial demand edged up according to a net balance of
+6% of respondents (+3% last time). That said, the Q4 reading
is still relatively soft compared to recent years.
Alongside this, space available for occupancy continued to
increase with regards to both the offi ce and retail sectors.
At the same time, industrial vacancies held broadly steady
this quarter. Nevertheless, the value of incentive packages
on off er to tenants continued to rise right across the board,
albeit this pick-up was more pronounced within the offi ce
and retail sectors and only modest for industrials.
Looking ahead, near-term rental growth expectations remain
more or less fl at at the all-sector level, posting a net balance
of -2% in Q4 compared to a reading of -4% in Q3. Likewise,
headline rental growth projections for the year ahead are
also fl at (net balance zero), albeit this aggregate fi gure masks
continued divergence across the various sub-sectors. Indeed,
rents for Industrial space are still anticipated moving higher
over the course of the next twelve months, with respondents’
views largely unchanged from the previous results (net
balance +48% for prime industrials and +14% for secondary).
Conversely, secondary retail rental expectations remain
entrenched in negative territory, returning a net balance
of -41% compared to a reading of -50% last time around.
That said, the outlook for prime retail rents appears to have
stabilised, with the twelve-month expectations net balance
moving to -4% from a value of -13% previously. In fact, this
reading marks the least negative view on prime retail rents
since Q1 2018. In parallel with this, the offi ce sector appears
even more polarised, as rental expectations moved further
• Occupier and investor demand metrics remain downbeat away from the industrial sector
• The gap between prime and secondary offi ce rental expectations continues to widen
• The largest share of respondents now feel the market has reached the bottom of the
current cycle
rics.org/economics
into positive territory for prime space during Q4 (net balance
+30% vs +21% in Q3), but remained fi rmly negative for
secondary offi ce rents (net balance -44%).
When looking at the regional results, the national picture is
largely mirrored throughout most parts of the country. For
London however, the prime offi ce and retail markets stand
out as exhibiting stronger rental expectations than the UK-
wide averages (while secondary offi ce space appears to be
under even greater pressure across the capital).
Investment market
Overall investment demand remains relatively soft at
present, evidenced by the all-property investment enquiries
indicator posting a net balance reading of -19%. This is only
marginally less negative than the fi gure of -21% in Q3, with
the offi ce and retail sectors continuing to weigh most heavily
on the aggregate picture. Similarly, overseas investment
enquiries also continue to slip, with all sectors seeing a
decline (to a greater of lesser degree) in Q4.
On a slightly more encouraging note, the net balance for the
credit conditions measure came in at -5% in Q4, marking a
signifi cant easing in negativity relative to readings of -44%
and -75% seen in Q3 and Q2 respectively. As such, this
represents the least negative reading going back to Q1 2022,
while the prospect of a loosening in the lending climate
has the potential to stimulate something of a recovery in
investment activity as the year progresses.
With respect to capital values, only the prime industrial
sector displays clearly positive expectations for the year
to come, posting a net balance of +36% compared to last
quarter’s reading of +24%. On the same basis, respondents
do foresee a modest uplift in prime offi ce values (net balance
+11%), although the outlook remains fi rmly negative for their
secondary counterparts (net balance -46%). At the same
time, secondary industrial and prime retail values are seen
holding broadly steady over the next twelve months, while
secondary retail units are expected to see further capital
value declines.
By way of contrast, several of the more alternative sectors
tracked display a positive assessment for capital value
growth prospects over 2024. Leading the way, data centres,
life sciences, aged care facilities and student housing all
returned net balances in excess of +40% for capital value
expectations, while multifamily residential expectations
were not far behind at +39%. In each instance, twelve-month
projections were upgraded from last quarter. At the other
end of the spectrum, the outlook is only marginally positive
for hotels, while leisure values are seen falling slightly.
UK COMMERCIAL PROPERTY MONITORECONOMICS
rics.org/economics
Commercial property all-sector average
-80
-60
-40
-20
0
20
40
60
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Net balance %
-60
-40
-20
0
20
40
60
80
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Net balance %
-80
-60
-40
-20
0
20
40
60
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Net balance %
-40
-20
0
20
40
60
80
100
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Net balance %
Occupier demand Availability
Rent expectations
Inducements
-100
-80
-60
-40
-20
0
20
40
60
2006 2008 2010 2012 2014 2016 2018 2020 2022
Net balance %
-100
-80
-60
-40
-20
0
20
40
60
2008 2010 2012 2014 2016 2018 2020 2022
Net balance %
Investment enquiries Capital value expectations
UK COMMERCIAL PROPERTY MONITORECONOMICS
rics.org/economics
-100
-80
-60
-40
-20
0
20
40
60
80
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Office
Industrial
Retail
Net balance %
-60
-40
-20
0
20
40
60
80
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023
Office
Industrial
Retail
Net balance %
Occupier demand
Availability
Commercial property - sector breakdown
-100
-80
-60
-40
-20
0
20
40
60
80
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Office
Industrial
Retail
Net balance %
Rent Expectations by Sector
-60
-40
-20
0
20
40
60
80
100
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Office
Industrial
Retail
Net balance %
-100
-80
-60
-40
-20
0
20
40
60
80
2006 2008 2010 2012 2014 2016 2018 2020 2022
Office
Industrial
Retail
Net balance %
-100
-80
-60
-40
-20
0
20
40
60
80
2008 2010 2012 2014 2016 2018 2020 2022
Office
Industrial
Retail
Net balance %
Rent expectations Inducements
Investment enquiries
Capital value expectations
UK COMMERCIAL PROPERTY MONITORECONOMICS
rics.org/economics
-100
-85
-70
-55
-40
-25
-10
5
20
35
50
Prime Office Secondary
Office
Prime
Industrial
Secondary
Industrial
Prime Retail Secondary
Retail
Average
Q3 2023
Q4 2023
Net balance %
-65
-50
-35
-20
-5
10
25
40
55
70
85
100
Prime Office Secondary
Office
Prime
Industrial
Secondary
Industrial
Prime Retail Secondary
Retail
Average
Q3 2023
Q4 2023
Net balance %
0
10
20
30
40
50
60
70
Very Cheap Cheap Fair Value Expensive Very Expensive
Q3 2023
Q4 2023
% of Respondents
Early Downturn, 13%
Mid-Downturn, 27%
Bottom, 33%
Early Upturn, 24%
Mid-Upturn, 2%
Peak, 1%
% of Respondents
12-month capital value expectations
12-month rent expectations
Market valuations
Property cycle
Commercial property - additional charts
-20
-10
0
10
20
30
40
50
Multifamily Hotels Data centres Aged care
facilities
Student
housing
Leisure Life Sciences
Q3 2023
Q4 2023
Net balance %
12-month capital value expecations alternatives 12-month Rental expecations alternatives
-20
-10
0
10
20
30
40
50
60
70
80
Multifamily Hotels Data centres Aged care
facilities
Student
housing
Leisure Life Sciences
Q3 2023
Q4 2023
Net balance %
UK COMMERCIAL PROPERTY MONITORECONOMICS
rics.org/economics
East Midlands
Alastair Fearn, Nottingham, FHP, alastair@fhp.co.uk - Whilst supply
remains low, values will continue to rise despite demand being low
relative to 2021/22.
Aman Verma, Leicester, Phillips Sutton Associates, averma7.av@
googlemail.com - Demand for freehold development opportunities
has gone down due to construction costs and cost of borrowing.
Industrial demand still high.
Brendan Bruder, Northampton, , brendan.bruder@gmail.com - 2024
will be tough particularly with attention turning to politics, planning
reform and debt markets.
David Collett, Nottingham, Altus Group, david.collett@altusgroup.
com - Industrial rents continue to increase, but at a much slower
pace than the peak of Q1-2 2021. Lack of supply in some areas can
hinder true market rents being achieved, but industrial rents appear
to have continued to increase through 2023. Incentives are lower
to non-existent - depending on the product. The main growth area
appears to be life science/R&D offi ce space in the main centres of
Oxford, Cambridge and London.
David Smith, Northampton, Drake & Partners, dsmith@
drakeandpartners.co.uk - Demand is sticky but values are remaining
robust due to a lack of supply which is further restricted by a
polarised development sector and a broken planning system.
Ian Mcrae, Northampton, Chadwick McRae, icm@cmcre.co.uk - The
credit crisis and turgid planning system will continue to infl uence the
offi ce and industrial property markets.
Nigel Carnall, Sutton In Ashfi eld, W.A.Barnes LLP, njbc@wabarnes.
co.uk - The number of retail units available has increased as traders
retire. The demand for offi ces has reduced in our area.
Peter John Castle, Northampton, Hadlands, pjc@hadlands.co.uk -
Slightly improved outlook since infl ation has eased.
Roger Smalley, Nottingham, LSH, rsmalley@lsh.co.uk - Working in
valuation we have seen a drop off in the number of enquiries over
the last 12 months.
S Robson, Nottingham, Leicestershire County Council, steven.
robson@leics.gov.uk - Still mixed messages - some tenants
struggling others putting a more positive approach on.
Sam Spencer, Nottingham, Bruton Knowles, sam.spencer@
brutonknowles.co.uk - East Midlands markets are variable;
industrials and logistics continue to experience good occupier and
investment demand. Much offi ce slack has gone to alternative use
(particularly residential) so there is less stock available, which has
driven rents and capital values. Retail is still ‘patchy’ and moribund
areas with limited variety suff er declining demand and values. Hotels
and care are performing well generally, with performance and values
more infl uenced by operational cost infl ation.
Stephen Musson, Nottingham, Musson Liggins, sam@
mussonliggins.co.uk - Property owners are misreading the point
in the economic cycle and are expecting values to keep rising.
They mistake quoted prices for value and are often attempting to
borrow too much against property values. Whilst demand overall is
low at present, there is still good demand in this area for Freehold
Industrial Property with land.
Tim Bradford, Lincoln, Eddisons, tim.bradford@eddisons.com -
Diffi cult 2023 cross all sectors - forecasting a slow start to 2024 with
a gradual improvement from Q3 2024.
Eastern
Giles Ferris, Bedford, Stimpsons Eves, giles.ferris@stimpsonseves.
co.uk - We are at an interesting point in the market which will be
eff ected by how retailers trade over the Christmas period and will
determine the level of confi dence in the market in the New Year.
Jeff Fuller, Norwich, OA Chapman & Son Ltd, jeff dfuller@hotmail.
com - Offi ce and retail sectors continue to decline as does leisure
mostly due to business rates. I suspect leisure and retail decline will
continue until meaningful reform takes place although with general
macroeconomic factors it may already be too late.
Joe Darrell, Norwich, Claverhouse Limited, dudleybro@aol.com -
Secondary shops off er good value if they have a residential angle
and are in the right sort of town. Bigger centres are less attractive.
John Russell Spacey, Maidstone, Cobbs Consultancy, jrspacey@
hotmail.co.uk - Slow lacking in confi dence.
Jonathan Lloyd, Bury St Edmunds, Hazells Chartered Surveyors,
jonathan@hazells.co.uk - It is diffi cult to enthuse about the general
property market with uncertainty still prevailing over demand, the
general economy and the appetite for businesses to take on new
projects and risk. The offi ce market remains fragile and it, along with
a general sense of a drive towards wider economic effi ciency, would
be helped by a wholesale return of public sector offi ce workers to
their offi ces.
Mark Kohler, Bury Saint Edmunds, Merrifi elds, mark@merrifi elds.
co.uk - Some resurgence in offi ce requirements. Lack of availability
in secondary industrial market. Retail transactions continuing in
affl uent Suff olk towns.
Michael Lawton, Flitwick, , michael@trinitysolutions.org.uk - Greedy
landlords, promoted by greedy surveyors, keep trying to hold
rents at unrealistic levels thus driving unrealistic capital values. A
reset is needed across all sectors so that, whether it is domestic
or commercial, interested tenants and investors can actually
realistically consider taking on a lease, loan, or mortgage.
Mike Ayton, Cambridge, DTRE, mike.ayton@dtre.com - Most of the
focus on the Cambridge commercial market is on the life sciences
sector where increased supply is just starting to appear following
the last 2 years of virtual nil supply. As new schemes start, there is
still signifi cant occupier demand generating early interest.
Phil Gadd, Norwich, Regional & City Airports Ltd, phil.gadd@rca.aero
- New starts limited based on costs of construction outpacing rental
growth and return. New builds largely unaff ordable.
Sam Kingston, Norwich, Roche Chartered Surveyors, samk@
rochecs.co.uk - The market has remained resilient. Lack of supply
continues to prevail across the industrial sector and accordingly
rents are rising. The offi ce market remains subdued, with demand
generally for Grade A space. The investment market has seen too
little activity to show a pattern on pricing. Freeholds retain their
value.
London
Adrian James Peachey, London United Kingdom, Montagu Evans,
adrian.peachey@montagu-evans.co.uk - I operate across the
UK in the retail and town centre regeneration fi eld. Regional
transformation is of great interest.
Adrian Tutchings, London, Linays Commercial Limited,
commercialproperty@linays.co.uk - It will be a diffi cult run-in to the
New Year.
Andre James, London, Oakmount Real Estate, offi ce@
oakmountrealestate.com - Worst of the down cycle considered to be
over. Cost of borrowing easing but LTS still high. Confi dence will be
muted in 2024 exacerbated by election. ‘Try and survive to 2025!’
Andrew Cohen, Central London, Amsprop Estates Limited, andrew.
cohen61@btinternet.com - Generally subdued but improving
slightly.
Chartered surveyor comments
UK COMMERCIAL PROPERTY MONITORECONOMICS
rics.org/economics
Antony Milton, London, Between jobs, tonymiltonplease@gmail.
com - Economy looking bad, particularly after today’s news that an
election is likely sooner than 12 months. Political (and economic
- domestic and regional) chaos reigns. Bitcoin fl ying high, for
now, maybe overdue. London residential good, until a Labour
government anyway.
Ben Preko, London, Salter Rex LLP, bp@salter-rex.co.uk - Market is
unpredictable at the moment but we believe the commercial sector
may benefi t from movement of investment from the residential
sector (with residential landlords struggling to cope with various
changes in legislation).
Charles Kerr, London, Abodus, charles.kerr2@btinternet.com -
Huge uncertainty in all markets with student housing seeing an
outstanding performance due to supply issues.
Chris Adams, London, CBGA Limited, cadams@cbgarobson.com
- There is no true refl ection of the state of the market. Valuations
are based on assumptions and do not refl ect mark to market
values. There is limited distress as the lenders are not foreclosing.
Transactional evidence is scarce and we will not know the totality of
the downturn until we see forced sales. Money rates will not fall until
2025 and until they do, the sector looks risky and unattractive.
Chris Vane-Tempest, London, Vane-Tempest Private Offi ce LLP,
chris@vane-tempest.com - We face a challenging climate as fi xed
term fi nancing deals come to an end and landlords look to refi nance
/ reposition their portfolios. I think Q1:Q2 2024 will be an interesting
time for opportunities across all sectors.
Christopher Lacey, London, SRSL, christopher@srsl.co.uk - I
expect the current diff erence between sellers and buyers to erode
downward towards the buyers refl ecting lower long dated gilt yields
and to refl ect in lower values and hence valuations.
Edwin Luckham-Down, London, Lookout Development Partnership,
info@lookoutdevelopment.com - I have been told by real estate
solicitors that they are seeing the market dry up and funding
becoming ever more diffi cult.
Gareth Jones, London, Jones Granville, gareth.jones@jonesgranville.
com - Interest rate increases yet to have the major impact on values,
but this may come in 2024.
Geoff rey Davies, London, Harbert Management Corporation,
hdavies@harbert.net - Lack of activity refl ects the uncertainty in the
market.
Graham Marks, London, graham marks, graham@grahammarks.
co.uk - Very quiet locally in South-West London.
Hedley Merriman Frics, London, Pater Johnson merriman, hedley@
pjmsurveyors.com - There is still a reasonable demand for new
developments of plus 50,000sq ft in the areas of the northern
part of the city of London and Clerkenwell . This is for offi ce
accommodation. However, secondary offi ces are very hard to let
with rents and incentives refl ecting this. Generally in north London
industrial rents are still holding reasonably well but the market is
slowing and rents for new/modern warehousing is static/falling
slightly.
James Andrews, London, Kitchen la Frenais Morgan LLP, jandrews@
klm-re.com - Demand strengthening for primest London streets and
most affl uent London village locations - having a positive knock-on
for more secondary locations.
James Smith, London, Service Charge Associates Ltd, james@
scalimited.co.uk - Low demand.
Jamie Gordon, London, Lothbury Investment Management, jamie.
gordon@lothburyim.com - Feels like there is still further pain to
come across all sectors.
Jamie Naughton, London, ESH LLP, jamie@eshp.com - My
comments are specifi cally in relation to retail warehousing, the
area we specialise in. Valuations are nowhere near market pricing.
Occupationally, the sector is robust. But, investment is seeing lower
volumes. This is generally structural and not necessarily sentiment
in my opinion. Rates moved 125 bpts from March 23 to today, but
the RWH valuations moved around 25 basis points.
Jason Dowding, London, Fleurets, jasonwdowding@gmail.com -
Whilst the market remains fragile, there are some positive signs with
infl ation coming down and BoE rates stabilising. An election in 2025
could have an impact but I do not think either party will want to
destabilise the current economic position which remains delicate.
John Graham, London, Douglas Advisory Ltd, j.graham12@icloud.
com - Infl ation & interest rates have a negative impact. Upcoming UK
& USA general election also having a negative impact.
John King, L.B.Merton, Andrew Scott Robertson, jking@as-r.co.uk
- There are signs that the offi ce market in South London is waking
up, as tenants begin to return to the offi ce in greater numbers.
Greater incentives to potential tenants are being off ered, off set
with headline rents to accommodate capital values. The bounce
back has come from the leisure and retail sector. Centre Court in
Wimbledon comprising 320,000 sq ft renamed Wimbledon Quarter
now providing a mix of leisure and offi ce space with a hint of services
offi ces available in Spring 2024 is a start.
Johnny Huxley, London, Hux-RE, johnny@hux-re.com - Both investor
confi dence and momentum in the capital markets will improve
across the board when the Bank of England base rate decreases,
and infl ation is reduced.
Jon Andreas Pishiri, London, Jon Christopher Ltd, jon@
jonchristopher.com - Currently very tough. In fact, the toughest
conditions I can recall since the early 1990’s when I was a graduate.
Jonathan Knight, London Edinburgh, Corona Real Estate Partners
Limited, jonathanknight@coronarep.com - Equity for investments
remains readily available for the right assets but the lack of debt
funding is restricting the market.
Kamil Chowdhury, London, Petrichor Property Consulting, kamil@
petrichorproperty.co.uk - Landlords expectations on price still too
high.
Mac, London, macneel, lal - Uncertainly and more of the same.
Mark Belsham, London, Eddisons, mark.belsham@eddisons.com -
More interest from smaller offi ce occupiers leaving serviced offi ces
and taking lease for own space, albeit on fl exible terms. Secondary
retail strong demand up to £50,000 pa. Secondary industrial strong
with demand from traditional occupiers. Last minute delivery much
quieter.
Martin Kidd, Bracknell, Vokins, martin.kidd1@btinternet.com -
Landlords not appreciating the impact of rental increases to tenants
post the pandemic.
Mike Greensmith, London And South England, Sidican, mike@
sidican.com - Reaching an agreement on sales or leases is taking
longer to fi nish. There is a lot of nervousness to commit, and
cases of developers seeking to chip prices once agreed are far
more common. Obtaining planning decisions for the simplest of
applications is taking too long, and being able to discuss planning
matters with an offi cer is now rare.
Mr Mathew Jackson, London, EiA Real Estate, mathew.jackson@
eia-re.co.uk - The gap will continue to widen between prime and
secondary propoerty.
Nick Christoforou, London, NC Real Estate, nick@ncre.co.uk - Q2
onward next year all London real estate to go up.
UK COMMERCIAL PROPERTY MONITORECONOMICS
rics.org/economics
Simon Tuddenham, London, Lipton Rogers Developments,
tuddenham@liptonrogers.com - Market is near the bottom and
rents we expect to continue to grow as schemes will simply not be
deliverable, while capital values we expect to pick up by the end of
next year as interest rates start to drop.
Simon Wainwright, London, JPW Real Estate, sw@jpwrealestate.
co.uk - Market polarisation is clearly apparent with demand focused
on best assets, whilst for others there is little or no demand.
Construction cost increases have moderated but development
fi nance has become harder with several lenders withdrawing from
the market. Central London offi ce demand holding up well with
plenty of activity.
Stuart Beevor, London, Beevor Consulting Ltd, stuart.beevor@
yahoo.co.uk - Interest rates are falling in response to lower infl ation,
but the economy remains sluggish. Occupiers will demand best
quality space and the bifurcation of property between demand
for best and worst quality will continue. Investors will follow
accordlingly.
Tim Butler, London, South Kensington Estates, tbutler@ske.org -
Market is warming up - optimistic.
Tim Edghill, London, Space Asset Services Limited, tedghill@
spacedevelopments.org.uk - Q4 has felt relatively fl at and paused as
investors wait to see better value in the market. Recent economic
data will add confi dence that we are at the bottom, but recessionary
markers will quell this turning into any form of signifi cant uptick in
Q1 activity next year. There is a market sentiment that more distress
is on the way and capital will in the main remain cautious.
Tony Parrack, London, TP Consult, tonyparrack@tpconsult.co.uk -
There is still a noticeable shortage of larger fl oors (say 10-20k plus)
in core West End locations which were typically Mayfair and St
James’s. As a result, adjacent areas such as Soho and Marylebone
which were already popular are seeing great levels of demand and
rental increase. At the top end, requirements for ‘green’ buildings
is a given, at the bottom end the cost is paramount. We need, as an
Industry, to diff erentiate between ESG and green - they are far apart
and quite diff erent issues.
Tristram Frost, London And Western Europe, Atlas Property Advisors
Limited, twtfrost@googlemail.com - Probably nearing the bottom
of the current cycle thought not quite there yet...unless there are
more Black Swan events. Diff erent countries across Europe seem to
be in slightly diff erent phases. Many leading investors are out of the
markets untill possibly Q2 2024.
William Spencer, London, Vectis Property Group, william_spencer@
live.com - Distressed buyers looking to reduce overall debt is
starting to fl ood the market in all sectors.
Wlliam Nicol-Gent, South West London, Killochan & Co, louanna@
blueyonder.co.uk - Uncertainty prevails, the “excess” of “Health
outlets” is probably unsustainable. The eff ect (& complexity) of
Net Zero demands has yet to impact on Residential assessed
below B and D but will - severely - damage (undermine) occupancy
compliance.
North East
Alison Wright, Leeds, EY, alison.wright@uk.ey.com - Challenging due
to cost of debt fi nance but early shoots evident.
Barry Nelson, Newcastle Upon Tyne, Northern Trust Company
Limited, barrynelson@northerntrust.co.uk - The rental market
for smaller secondary offi ces remains challenging with enquiries
sporadic and take up of space slow. The smaller unit industrial
rental market within the north east is still achieving a good level of
enquiries and conversion rates to lettings are holding up, despite
the continuing economic backdrop of higher interest rates, high
power costs and supply chain price increases.
Nick Pemberton, London, Allsop LLP, nick.pemberton@allsop.co.uk
- Central London commercial investment volumes are likely to fi nish
the year at £6.0Bn – with long term average annual volumes around
£15Bn. This is even slightly lower than the 2009 GFC Central london
volumes - this time around we have buyers and we have sellers,
but the bid ask spread is still too wide, causing the historic low in
market volumes. Sellers are not yet refl ecting the rapid change in
the cost of debt into their pricing and buyers are extremely cautious,
particularly £50M+ lot size.
Nigel Biggs, London, CBRE, nb@nigelbiggs.co.uk - Conditions are
now right for some well priced purchasing.
Nigel Harrison, London, harrison leggett, nh@harrisonleggett.
co.uk - Prime offi ces remain in short supply and are generating ever
increasing levels of rent. Secondary offi ces continue to experience
lack of demand across Central London. The fl exi offi ce market is
reaching saturation point in my opinion.
Omur Payne, London, Day and Bell Surveyors Ltd, omur.payne@
dayandbell.co.uk - We have mix portfolio in/around London, and
in Devon. We have a large portfolio of secondary retail parades/
neighbourhood centres. We focus on tenant mix being right. We
have hardly any vacant units, and rents increased approx 20%
over the last 3 years. Industrial similar. Offi ces attractive for resi
developers, all our offi ces occupied. We are buying more sites
through development funding agreements. We work bridging the
gap between the landlords and tenants. Hope to see more of that
happening.
Phil Weller, London, Gerald Eve LLP, pweller@geraldeve.com - I
advise occupier clients across the UK with a recent focus in central
London offi ces. The most recent transaction I have advised on was a
90,000 sqft offi ce subletting in Stratford. I think there are diverging
rent and incentive packages between prime/secondary stock which
is being accentuated by signifi cant capex requirements required to
reach sustainability targets on secondary stock.
Professor Graham F Chase, London, Chase Sinclair Clark LLP, gfc@
chasesinclairclark.co.uk - Global events creating uncertainty with
fl ight to security and few good quality properties becoming available
but an increase in secondary and non compliant with environmental
criteria space. Much of the development market is struggling with
signifi cant increases in cost of materials with viability often diffi cult
to secure. Even though headline infl ation is falling, the increases in
the pricing of raw materials over the last 2 years has outstripped
property returns and CVs.
Robert Bath, London, QUadrin Valuations Ltd, rbath@ipva.com.
au - Overall a reduction in asset values in the lower end of the price
spectrum due to increasing interest rates erroding real income
values and a continuation of the decline in confi dence for UK assets
due to the removal of the UK from the EU.
Rod Bowers, London, Wimbledon Exclusive, realapps2016@gmail.
com - Stubborn supply side constraints obstructing fair price
discovery.
Rodney Eborn, Romford, Retired, rodneyeborn654@gmail.com - The
market is making downward adjustments to refl ect current cost of
interest rates/borrowing and infl ation.
Russell Francis, London, Colliers International, russell.francis@
btinternet.com - The probable peak in interest rates and the
medium hope for economic recovery and hence rental increases is
starting to have a positive impact but it is tentative at the moment.
S P Dempsey, London, Boultbee LDN Capital Ltd, sean@boultbeeldn.
co.uk - Expectations of the beginning of a recovery in both the
occupational and investment markets, across most sectors and
at some point in late 2024 or early 2025, are now more openly
discussed. A continued return to offi ce occupation, reducing energy
costs, stabilised interest rates, an end to the confl ict in the Middle
East, and an improvement in funding availability could do it.
UK COMMERCIAL PROPERTY MONITORECONOMICS
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James Carter, Preston, Eric Wright Group, jimc@ericwright.co.uk - A
very nervous backdrop with many holding back for the time being.
James Munnery, Manchester, Footprint, jamesmunnery@
footprintpropertyservices.co.uk - Tentative signs of recovery
particularly in city centre offi ces.
Martin Acton, London, Howard Harrison Ltd, martin.acton@hhretail.
uk - Demand for the better centres is improving - the real issue is
still an oversupply in the smaller and weaker towns.
Michael Nuttall, Clitheroe, Brookhouse Group, mike.nuttall@
brookhousegroup.co.uk - Continuing economic uncertainty, driven
in the main by external factors to the UK. These have increased
cost and continue to threaten demand, growth and values. Adding
in political uncertainty, this is also having a negative eff ect on
sentiment.
Michael Walton, Carlisle, Walton Goodland Ltd, michael@
waltongoodland.com - The market outside major cities in the North
of England and Southern Scotland is at best static and hardly keeps
pace with infl ation. A lack of banking and credit facilities for SMEs,
an uncertain political future and fi scal uncertainty are underlying
reasons for lack of demand, coupled with changing work patterns
and poor economic growth.
Mike Fisher, Lancaster, Fisher Wrathall Commercial, mike@
fwcommercial.co.uk - Lack of readily available land for industrial
development is holding back the local economy.
Neil Lovell-Kennedy, Manchester, Proxmity, neil@weareproximity.
co.uk - Generally fl at market especially for secondary properties.
Peter Green, Stockport, Railway Paths Ltd, pgreen1098@gmail.com
- The mainstream market remains unsettled by the impacts of Covid
and creeping digitalisation of work and retail environments. Post
covid patterns of working seem to be driving moves to higher quality
but smaller units refl ecting lower levels of staff attendance. This is
impacting on associated retail activity at both prime and secondary
levels.
Richard Fee, Manchester, Nikal, rjf@nikal.uk.com - A general election
will see 2 years of inertia. Risk in USA election. War in Ukraine and
Palestine set to continue. Care costs crisis in UK. Taxes too high
but need to go higher. North of England continues to decline versus
South. Local authority fi nance in distress. Pay crisis in NHS. Banks
in denial about bad loan books. Three year depression is likely - akin
to 1929.
Rick Gordon, Manchester, Stewart Montrose, rgordon@
stewartmontrose.com - Market conditions remain uncertain. Many
businesses lack confi dence in the economic conditions and most
at best remain neutral in terms of investing capital back into the
business. Construction and supply chain costs (including labour)
remain high meaning development appraisals often throw up
negative values. A general feeling that values have not yet reached
the bottom and that “deals” may start to come through during 2nd
half of 2024. A general election to get through etc.
Robert Keith Dalrymple, Isle Of Man, Keith Dalrymple Chartered
Surveyor, keith.dalrymple@outlook.com - Political and economic
uncertainty exacerbated by negative media coverage is undermining
confi dence.
William Madada, Manchester, Jacobs, william.madada@jacobs.com -
There seems to be perceived upturn and return for the offi ce sector
in the north west by 2025.
Northern Ireland
Arthur Connell Hugh Nugent, Newry, Young -Nugent, achn488@
outlook.com - Industrial property or agricultural land have been
steady in both rental and capital value in recent times. Retail and
offi ce has been shaky.
David Downing, Newcastle Upon Tyne, Sanderson Weatherall LLP,
david.downing@sw.co.uk - The shortage of supply of Grade A offi ces
is beginning to persuade landlords to refurbish their Grade B/C
stock to better standards to obtain improved rental values. Despite
the prevailing economic conditions and the uncertainty around who
will be governing the UK that comes with a forthcoming general
election, the NE real estate market still feels relatively optimistic.
Duncan Grant, Barnsley, Grant Fieldhouse, duncan@
grantfi eldhouse.co.uk - While demand has reduced, overall stock
levels remain very low so values have not been signifi cantly aff ected.
Graham Hall, Durham, Graham S Hall Chartered Surveyors, ghall@
grahamshall.com - Many changes in Durham City centre with
redevelopment proposed for Prince Bishops shopping centre as
such retailers looking to relocate. Prime Silver street changing from
fashion and tech retailing to food and beverage with many food
tech and fashion retailers moving out of town. City is dominated by
students with the University having expanded in last few years.
Helen Wall, Sunderland, Bradley Hall Sunderland, linsleyhelen@
yahoo.co.uk - Opportunistic, out of town cash investors are
seeking bargains on high yielding properties and development
opportunities. Commercial properties are still transacting but must
be priced appropriately. Residential buyer demand remains strong
in the North East but sensitive to pricing.
Kevan Carrick, Newcastle Upon Tyne, JK Property Consultants LLP,
kevan@jkpropertyconsultants.com - A quiet market. Too early to
see impact of benefi ts off ered to businesses through the Autumn
Statement. Good news of inward investors from automotive, energy
and digital sectors for the NE region.
Simon Haggie, Newcastle Upon Tyne, Knight Frank LLP, simon.
haggie@knightfrank.com - Feels like nothing is happening of any
signifi cance and people are sitting on their hands waiting for an
upturn which may or may not happen in the next 6 - 12 months.
Stephen Bennett, Durham, N S Bennett and Associates, stephen@
nsbennett.co.uk - Flat with realistic prices essential to achieve sales
or lets.
North West
Andrew Taylorson, Preston, Eckersley Property Limited, at@
eckersleyproperty.co.uk - The shortage of available stock and land
for development has meant that there has been limited market
reaction to higher levels of interest rate but it is apparent that
many businesses and investors are cautious in their approach
to purchasing new assets unless needs must. There is limited
speculative development at the present time but owner occupiers
are still actively looking. Residential development and the delivery of
stock has, however, slowed but the appetite for land remains.
Charles Maunsell, Liverpool, Blackpool Council, charliemaunsell@
aim.com - General upturn in areas like Liverpool...less so in
Blackpool.
Graham Cooke, Manchester, GEECEE property consultancy,
gj.cooke@outlook.com - Generally the market across most sectors
except retail is holding steady. Residential will depend on an
optimistic spring activity level and a hold on interest rates. Industrial
has pegged back a little and offi ce working is still uncertain although
workers prefer to interact with co workers. City centres suff er due to
uncertain public transport effi ciency and high car park charges.
Henry Prescott, Liverpool, Prescott & Partners, henry@
pandpartners.co.uk - The ability to borrow money and the cost
of money is fundamental. The elders are few and the cost is
extortionate.
Henry Simon Miller, Bolton, Millers Commercial, simon@
millerspropertyservices.co.uk - Market remains very diffi cult.
Ian Birtwistle, Manchester, The Childrens Society, ian.birtwistle@
childrenssociety.org.uk - Slow upturn.
UK COMMERCIAL PROPERTY MONITORECONOMICS
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South East
Adrian Howse, Tunbridge Wells, Howse Associates Ltd, adrian@
howseassociates.co.uk - The commercial property market looks
to be on a downward trajectory although I think that it will bottom
out by the Spring of 2024. The industrial warehousing market has
been remarkably resilient until recently when ocupier demand has
noticably declined. I expect market rents in this sector to come
down. The retail and offi ce markets have possibly already hit the
bottom and may begin to pick up ahead of the industrial warehouse
market.
Alex Hirst, Winchester, Gentian Development, hirstalex@hotmail.
com - Market conditions surrounding development will largely be
determined by infl ation and interest rates over the next 12 months.
Almost all appraisals are skinnier due to high cost of borrowing, high
build costs and pressures on values from interest rate hikes.
Alex Medhurst, Chichester, Medhursts Commercial Surveyors,
alex@medhursts.com - I am sensing a fairly fl at market across
most sectors with increased borrowing costs and the prospect of
a general election in the next 12 months likely to hold up decision
making and confi dence.
Aroon Rana, London/ South East, , aroonrana@gmail.com - The
secondary market overall, although down from this time last year,
appears to be holding up better than the prime market across most
key sectors.
Ben O’Connor, London & Se, Benocpc, benoc72@gmail.com -
Developer nervousness, investor caution, commercial occupier
down, BTR up.
Charles Palmer, London/ South East, Charles Palmer Property Ltd,
cp@charlespalmerproperty.com - Green shoots of recovery. Retail
still hampered by punitive business rates. Offi ce occupiers returning
and the service industries in town and city centres are recovering
slowly too.
Christopher Sims, Tunbridge Wells, CHRISTOPHER SIMS LTD, cjsims@
cjsimsllp.com - The market is in the doldrums waiting for political
change, tax cuts & lower debt costs.
Colin Brades, Brighton & Hove, Avison Young, colin.brades@
avisonyoung.com - Brighton prime retail: Generally a slight upturn
in the number of requirements received and open market lettings
successfully completing. Secondary retail market demand remains
static.
Conrad Bacon, Carshalton, Town Centre Regeneration Ltd, cb@
conradbacon.co.uk - Signs of rents having stabilised in retail, but at
a level that remains suppressed by rates. Increases possible, but
rating system is the primary blocker of, and cap on, growth and
investment - far higher barrier than in France, for example. This
leaves physical centres of communities too expensive to run, they
lack the stock and online retail becomes dominant.
Courage Ikonagbon, London/ South East, Royal Borough of
Greenwich, courage.ikonagbon@royalgreenwich.gov.uk - The
industrial market in the South East has been resilient in the face
of high interest rates albeit now showing signs of stabilisation with
the Bank of England possibly cutting rates in the coming years.
Occupancy rate and rent levels generally have been encouraging .
However, the retail sector has not improved post the pandemic with
landlords having to off er substantial incentives to secure lettings.
David Hooper, Redhill, HCP Ltd, david@hoopercommercialproperty.
com - Have seen an uptick in enquiries and activity since October.
Retail led by independent, franchised and market town operators.
Leisure we are seeing some F&B, but much more competitive
socialising and sport/lifestyle related concepts. Bowling, Axe
Throwing, Darts, Ping Pong and Yoga/Pilates.
Scotland
Chris Paterson, Edinburgh, Burns & Partners, cp@bap.co.uk - We
have seen a signifi cant drop in enquiries to purchase premises
from investors and occupiers alike. Increasing interest rates and
tightening lending criteria have been major factors.
Craig Thomson, Glasgow, City Property Glasgow (Investments) LLP,
craig.thomson@citypropertyglasgow.co.uk - Slow and unchanged in
recent times.
David Rooney, Glasgow, Whitelaw Baikie Figes, david@wbf.co.uk - For
buyers with access to funds, there are plenty of opportunities to
cherry pick from.
Douglas Wilson, Glasgow, Kintyre LLP, douglas@kintyre.uk.com
- Expecting a relatively slow start to the year but an outlook/
expectation of improving market conditions towards the back half of
the year, although this will be determined in large part by infl ation/
interest rates and the outcome of the General Election, both of
which could have a material impact on the performance of the
commercial property market in 2024.
Gavin Anderson, Glasgow, whitelaw baikie fi ges, gavin@wbf.co.uk
- General lack of investment stock , complicated and understaff ed
planning systems makes new development pipeline slow and
unreliable. If you need to take debt then realistically you need to be
an existing borrower, very hard for new entrants.
Graham Mitchell, Glasgow, George Davie, grahamm@georgedavie.
co.uk - There are signs of recovery in the market place and there
are increases in enquiries and demand. There are sectors that are
defi nitely seeing improvements in enquiries and business activity
over a number of sectors.
Guy Strachan, Edinburgh, Smolka Strachan LLP, guy@
smolkastrachan.com - A diffi cult market with build costs & debt
pricing still high.
John Brown, Edinburgh, EDINBURGH AND LONDON LTD, john.
brown@jb-uk.com - Despite the concern of many as to the fi nancial
management of Scotland by the SNP/Green Coalition and impact
of tax rises announced and clear fi nancial burden faced through
imprudence, there is still confi dence in doing business in the
major cities and professional service provision is focusing on less
space but better buildings and more effi ciency. Older offi ce stock
continues to revert to residential use. Industrial units still at a
premium. Retail is selective, locations change to Hubs.
John White, Glasgow, Hunting Real Estate, john@huntingrealestate.
co.uk - Offi ces are probably nearing the bottom of the cycle, as
is retail. However the lack of supply of development land for
Industrials will continue to drive rents forward.
Len Kidd, Edinburgh, Retired, len.kidd57@btinternet.com - I notice
a general shrinking of traditional “High Street” prime areas in part
to contrived communication/ transport diffi culties - Low emission
zones/ reductions in public transport. Some increase in minor,
small industrial unit development on secondary location or close to
residential. No noticeable increase in any offi ce sector other than
via public authority need - though even there a desire to move away
from the large offi ce building to free up site for new development.
Malcolm Donald, Dundee, Valuation, malcolm.donald@g-s.co.uk -
Limited due to being a residential surveyor and limited commercial
work.
Paul Kettrick, Falkirk, Falkirk Council, pkettrick@gmail.com -
Industrial demand buoyant locally due to infrastructure investment
programmes.
Robert Harkness, South Lanarkshire, South Lanarkshire Council,
robert.harkness@southlanarkshire.gov.uk - Industrial market is
strongest.
Shaun Crosby, Fife, Fife Council, shaun.crosby@fi fe.gov.uk -
Challenging times, with borrowing rates high and uncertainty in
offi ce occupation levels.
UK COMMERCIAL PROPERTY MONITORECONOMICS
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Nathan Wareing, London, Wareing & Partners, nathan@
wareingpartners.com - Capital values may be building in more risk
in the commercial leisure market than actually exists. Occupational
demand remains selective but fundamentally strong.
Nick Ekins, London/ South East, Gentian, nick@gentian.co.uk - Prime
retail still looks very cheap - too cheap. But more competition from
investors has entered the market.
Paolo Antonio Iacobucci, Ipswich, countywide properties, paul@
countywideproperties.co.uk - Market for industrial still showing
resilience, retail and offi ce sector weak.
Paul Russell, Winchester, Carter Jonas, paul.russell@carterjonas.
co.uk - Still signifi cant caution in the markets.
Philip Marsh, Beaconsfi eld, Philip Marsh Collins Deung, philip@
pmcd.co.uk - It has been a tough 9 months and 2024 has the
potential to continue to be diffi cult.
Phillip Fry, Bournemouth, Phillip Fry FRICS, phillipfry28@btinternet.
com - Fundamental demand likely to rise from bottom of cycle.
Richard Harding, London/ South East, Bray Fox Smith,
richardharding@brayfoxsmith.com - Prime headline rents for best
in class offi ces will continue to increase whilst secondary rents will
come under downward pressure. Capital values will fall as a result of
yield shift brought on by rising interest rates.
Sharon Roskilly, St Albans, Hertfordshire County Council, sharon.
roskilly@hertfordshire.gov.uk - St Albans remains static, low
availability continues due to lack of new development. Broxbourne
seeing higher level of upcoming development proposals in
Hertfordshire.
Simon Browne, Brighton, Crickmay Chartered Surveyors, scb@
crickmay.co.uk - Noticeably less bank lending on new purchases.
Simon Lawson, Brighton, Jason & Lawson, lawson6102@gmail.
com - Confi dence is not strong generally with so many economic
uncertainties, with most predicting a mid to late 2024 slow recovery.
Stephen Ray, Redhill And Reigate, SHW, sray@shw.co.uk - If
interest rates do fall we are likely to see a general property market
strengthening in the South East.
Steve Masters, London/ South East, Chase Realty, steve.masters@
chaserealty.co.uk - Whilst the economic backdrop and markets
remain challenging, retail pricing, particularly top retail parks,
looks attractive compared to other sectors. Occupier demand in
hospitality/leisure appears to be picking up slightly too in better
markets.
Stewart Gray, Brighton, Austin Gray, stewartgray@austingray.
co.uk - Market diffi cult - funding very diffi cult -many buyers turning
to private funding and ignoring major Banks with their restrictive
policies. Yields have rocketed.
Terence Firrell, London/ South East, Terence Firrell Ltd, terence@
terencefi rrell.co.uk - All market sectors in my view are aff ected by
uncertainty, which will impact upon future growth in respect of
rental and capital values.
Tim Davis, Sussex, Hargreaves, timjadavis@gmail.com - Treading
water and waiting to see a clearer picture on interest rate rise
impacts, political change and geopolitical stability and direction in
the Middle East. Also waiting for the rain to stop.
Victor Forson, Tunbridge Wells, Tunbridge Wells Borough Council,
victor.forson@tunbridgewells.gov.uk - Early recovery of the markets.
David Martin, Brighton, SHW, dmartin@shw.co.uk - Activity in all
commercial sectors remains positive but transactions are taking
too long to complete and the outlook for the economy remains
uncertain. The direction of travel of interest rates is very important
now, in terms of providing confi dence back to the economy and for
companies decision making process.
Dermot P Main, Woking, Main Allen, dermot@mainallen.com - Very
diffi cult to engage clients in acquisitions and they are taking far too
long to be documented and completed.
Desmond Ely, Southampton, Ely Langley Grieg, dr.ely@btinternet.
com - The retail market has been rather slow as have offi ces whilst
industrial has been more positive.
Edward Iliff e, Southampton, Yattendon Group, edward.iliff e@
yattendon.co.uk - I believe there will be some interesting buying
opportunities as yields increase.
Henry Richard Howard-Vyse, London/ South East, , henry.
howardvyse@gmail.com - Regional and location variations on top of
those of sector and building characteristics make valuation more of
an art than a science at the moment.
Iain Steele, Farnham, Park Steele, iain@parksteele.com - Freeholds in
all sectors continue to be of interest with multiple potential buyers
bidding, although no real price increases. Leasehold shops at the
lower end of market remain of interest to independents but up
to certain rental level, only varying from area to area. Leasehold
offi ces remain subdued although some takers and alternative users
taking up some of the space. The market in general was quiet in
the summer then picked up during October to November then has
settled down again in December.
Jeremy Clayden, Crawley, Sanguine Surveyors, jeremy@
sanguinesureyorsl.com - I believe the market is awaiting an
indication of the change in political climate and the announcement
of a general election.
John Mitchell, London/ South East, Avison Young, john.mitchell@
avisonyoung.com - General evidence in the market that with
stabilised interest rates and borrowing costs reducing, there is a
bit more certainty which is helping to increase leisure spend in the
market.
Jon Chapman, Central Milton Keynes, Pinders Professional &
Consultancy Services Ltd, jon.chapman@pinders.co.uk - The rapid
rise in interest rates has had a greater impact on market activity and
values than the Covid pandemic but some stability may return as
interest rates fi nd their new level.
Mark Howard, London/ South East, Doherty Baines Limited,
mhoward@dohertybaines.com - Older secondary offi ces and lower
grade industrial to have capital values and rental growth curtailed
by MEES and EPC requirements. For offi ces, a prerequisite for a
successful leasing campaign is strong ESG credentials and for larger
companies it is also for a building to assist them in the reduction of
operational carbon.
Mark Minchell, Chichester, Flude Property Consultants, m.minchell@
fl ude.com - We are looking at optimism for 2024 with shoots of
recovery, all things being equal, showing by spring and a stronger
end to 2024 than 2023.
Matthew Diamond, Basingstoke, Diamond Land, matthew.
diamond@diamond-land.co.uk - I expect the yield on 10 yr gilts to
rise over the next few years under a new Labour administration.
This will increase the cost of fi nance and decrease capital values.
Mellawood Properties Ltd, Beaconsfi eld, Mellawood Properties Ltd,
bryan.galan@outlook.com - Market fragile and little demand with
rents continuing to drop. Investment demand but only for good
quality assets/covenants.
Michael Rowlands, Haslemere, Lambert Smith Hampton,
mrowlands828@gmail.com - Diffi cult conditions across most of the
markets. No upturn yet.
UK COMMERCIAL PROPERTY MONITORECONOMICS
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Luke Sparkes, Cirencester, Marriotts Property, luke.sparkes@
marriotts.co.uk - There has been the expected downturn in demand
for commercial property to let due to the impending Christmas
holidays. The New Year still appears to bring uncertainty but one
hopes we will begin to turn the corner by Spring.
Michael Oldrieve, Exeter, , m.oldrieve@btinternet.com - Steady as
she goes.
Mike Nightingale, Truro, Miller Commercial LLP, msn@miller-
commercial.co.uk - Transaction volumes have reduced in H2 2023
and transaction times have become protracted due to a lack of
urgency and competition amongst buyers. There are early signs that
this status quo is shifting as interest rates appear to have stabilised.
Oliver Workman, Cheltenham, THP Chartered Surveyors, oliver@
thponline.co.uk - General market conditions remain fl at. Survive until
25 is being said a lot and there is some truth in that phrase. There
are some sectors remaining more resilient including secondary retail
and industrial.
Patrick Dempsey, Circencester, Royal Agricultural University,
fosseproperty@gmail.com - Market remains nervous.
Peter Woodley, Cheltenham, Cheltenham Borough Council,
peter.j.woodley@btinternet.com - Interesting times, especially for
ground rents and residential development.
Roger Ewart Smith, Swindon, Wilts. Sn4 8Dt, Smith and Foyle,
Chartered Surveyors., smithandfoyle@btconnect.com - Swindon
Wilts, is suff ering very badly with regard to town centre retail trading
and retail outlets doing well are those out of town centres with easy
access, no parking charges, with no drunken louts and beggars to
annoy and upset shoppers. Some demand for smaller industrial
units and the larger occupiers of multiples seem to be holding their
own. Very few new occupiers of small industrial units but some
specialist outlets are thriving.
Rupert Stephens, London, Hobden Group, rupert.stephens@
hobden-group.co.uk - Negative outlook for all sectors across
investment, occupational and development. Expect a period of low
activity ahead of a larger downturn.
Simon Walsham, Bournemouth Poole And Christchurch, James
and Sons, simonwalsham@jamesandsons.co.uk - Industrial market
growth has slowed but demand still exceeding supply. Retail market
remains poor with the exception of pockets of growth in select
locations. Offi ce market fl at.
Stephen Matcham, Plymouth, stratton breber commercial, stevem@
sccplymouth.co.uk - Market shows signs of returning confi dence.
Tim Smith, Cullompton, Hitchcocks Business Park Limited, tim@
hitchcocksbusinesspark.co.uk - Lack of new build stock holding up
capital and rental values.
Tim Wright, Dorchester, Greenslade Taylor Hunt, tim.wright@gth.net
- The commercial property market remains fairly quiet with generally
low enquiry levels. The industrial sector continues to outperform
the retail and offi ce sectors. We will get a better idea of where the
market is heading in the New Year.
Wales
Chris Sutton, Cardiff , Sutton Consulting Ltd, chris.sutton@
suttonconsulting.co.uk - The commercial property market in
Wales experienced an increase in supply, however, Grade A
accommodation remains in demand with rising rents in both
industrial and offi ce sectors for the very best fl oorspace. Industrial
rents at St Modwen Park, Newport now exceed £9.00 per sq ft for
new-build accommodation with healthy take-up in 2023. The central
Cardiff offi ce market continues to see churn as occupiers use lease
events to readjust to new ways of working with Veezu relocating to
Hodge House.
Will Staniland, London/ South East, Rumsey and Partners, will@
rumseyandpartners.co.uk - Sense we have spent the last 3 months
reaching the bottom of the market zone, but still signifi cant vendor
reluctance to accept realities. As such, this bottom period will
continue for another 3-9 months as refi nancing, in particular,
becomes an uncomfortable reality forcing vendors to reconsider
where the values are and opportunity buyers start cautiously
moving into the market at pricing which is discounted to current
levels.
South West
Alastair Andrews, Swindon, Loveday, alastair@loveday.uk.com -
Although occupier demand has generally reduced in the Swindon
industrial market, supply of good quality space across all size ranges
remains constrained which is continuing to put upwards pressure on
rents and capital values. A lack of land supply is holding back new
development and unless we see a signifi cant increase in business
failures, these trends may well continue.
Andrew Hardwick, Bristol, Carter Jonas, andrew.hardwick@
carterjonas.co.uk - Market conditions are challenging with economic
and political conditions subduing sentiment. High quality new
offi ces with strong sustainability credentials are still able to
command high rentals and capital values for owner occupier offi ces
in Bristol have held up well, in the latter case due to acute scarcity
and the availability of cash.
Andrew Kilpatrick, Swindon, Kilpatrick & Co Commercial Property
Consultants Limited, a.kilpatrick@kilpatrick-cpc.co.uk - Market
relatively subdued in Swindon & surrounds, refl ecting fl at economy
and lack of confi dence in the face of global uncertainties from the
wars in Ukraine & Gaza, infl ation worries from prospect of rising
energy costs and UK political uncertainties for 2024.
Chris Wilson, Poole, Goadsby, chris.wilson@goadsby.com - Business
confi dence has improved since interest rates stopped rising and
following headlines reporting that infl ation has continued to fall.
Damian Cook, Exeter, Stratton Creber Commercial, damian@
sccexter.co.uk - Reasonably healthy demand for correctly priced
property with caution shown by prospective buyers.
Daniel Smethurst, Swindon, Smethurt Property Consultants Ltd,
daniel@smethprop.co.uk - General enquiry levels are down but we
are seeing the return of larger offi ce requirements with a primary
focus on ESG and a quality built environment.
David Monk, Plymouth, Monk & Partners, david@monkandpartners.
co.uk - Unsettled with delays at legal stage leaving a number of deals
not proceeding to completion. Worry with interest rate levels and
debt the main factor holding back sales.
Huw Thomas, Chippenham, Huw Thomas Commercial., huw@
huwthomascommercial.com - Slight resurgence in the offi ce market
as companies strive to entice staff back to an offi ce environment.
Reduced demand in the industrial and warehouse sector,
particularly for mid size units; good demand for secondary retail
with a particular increase in demand by independent convenience
store operators.
Ifan Rhys-Jones, Plymouth, Listers, irj@listers.uk.com - Supply still
fairly thin. Development remains marginal. Occupier demand has
eased but is still out of balance with supply.
John Corben, Swanage, Corbens, john@corbens.co.uk - The
commercial market for the retail sector has remained encouragingly
constant with many new business start ups. Landlords have had to
to negotiate with opening incentives and fair rents.
Jon Stone, Exeter, Jon Stone Surveyors, jon@jonstone.co.uk - Small
space occupier and investment market holding up. Others faltering.
UK COMMERCIAL PROPERTY MONITORECONOMICS
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John Andrews, Kidderminster, Doolittle & Dalleuy Holdings Ltd,
johnandrews@doolittle-dalley.co.uk - Industrial rental and capital
values increasing due to demand outstripping supply. Retail and
offi ces poor.
John Emms, Dudley, John Emms Commercial, john@
johnemmscommercial.co.uk - High St retailers seem to be
experiencing a diffi cult trading time evidenced by the number of
discounted off ers available pre-Christmas. The impact of Wilkinsons
stores closures around the country is having a marked eff ect
in many town centres across the region. Demand for freehold
industrials is still good but lack of stock is helping to keep prices at
current levels.
Michael D Jones Frics, Malvern Worcestershire, Michael d jones
ltd, mjones5400@yahoo.com - I believe an increasing downturn in
demand to rent both retail and offi ce premises and in particular
secondary premises will accelerate over the year ahead . However, I
anticipate capital vales for warehouse/industrial premises will hold
fi rm as in my previous long experience of such market conditions eg
the early 1990s and between 2008/12.
Mr Simon Horan, Hereford, Fairfi eld Land & Development Ltd,
simon.horan@fairfi eldland.co.uk - Speculative is on the decline
as the market tries to reduce its risk profi le to short term market
fl uctuations. Until there is a noticeable trend that infl ation is under
control and the economy is on the up, low risk assets will be the
order of the day where demand remains strong and the supply
chain is weak.
Neil G Harris, Birmingham, Lane Cove, neil@lanecoveproperties.com
- The market is in ‘slack water’ meaning the tide is neither outgoing
nor incoming, it is really waiting for the market to choose a direction
of travel, most likely dictated by politics and (planning) policies.
Nick Yates, Birmingham, Colliers, nick.yates@colliers.com - Seeing
a lot of interest in the independent retail sector, and equally some
consolidation from the larger retailers. Demand for prime industrial
space still appears at a premium. Lots of new construction is making
prime space the new norm so secondary and tertiary space is
being devalued and landords having to consider refurbishment or
development options to ensure compliance with modern legislation
and to avoid obsolescence. Lifecyle of properties is shorter now to
meet modern tenant needs.
Paul Beardmore, Stoke-On-Trent, Butters John Bee,
paulbeardmore@bjbmail.com - Slow but steady.
Paul James, Stoke-On-Trent, , pjames.huntersview@gmail.com - Flat.
Peter Holt, Coventry, Holt Commercial Ltd, peter@holtcommercial.
co.uk - Industrial still sees a good demand across the whole sector.
Demand for offi ces having been very poor is just beginning to
improve particularly for mid size units from 3,000 to 8,000sq ft. A
shift towards sustainable space. Retail will be interesting with the
redevelopment of Coventry City Centre South. This is creating a
demand from some retailers needing to relocate to accommodate
the development.
Philip Moran, Redditch, Philip Moran Chartered Surveyors,
philipjmoran@yahoo.com - The market refl ects the present fi nancial
position.
Richard Topps, Stratford Upon Avon, NFU Mutual, richard_topps@
nfumutual.co.uk - Markets remain fragile. Expectations are for
growth into 2024 and beyond but few consistent signs of that
materialising yet.
Simon Smith, Atherstone, Smith Brothers (Tamworth) Developments
Limited, chris@bat-survey.co.uk - The market appears to be mid
downturn in some sectors with values higher than bids in some
sectors.
Tony Broad, Alvechurch, Birmingham, Tony Broad Associates,
timbroad1103@gmail.com - Challenging.
Dylan Williams, Swansea, Rees Richards and Partners, dylan@
reesrichards.co.uk - The tide is certainly turning in Swansea, with
the local authority and local developers taking the initiative in
redeveloping city centre property, in turn, leading to an upturn in
prime offi ce rents and capital values. It is hoped that with a vastly
improved city centre off ering and footfall, the decimated retail
sector will recover. In addition, well serviced industrial property
along the M4 corridor is also seeing an upturn in demand; long may
it continue.
Haydn Thomas, Newport, Hutchings & Thomas, ht@hutchings-
thomas.co.uk - Industrial market remains buoyant with good tenant
and purchaser demand. Supply still low with reduced development.
Offi ce market showing some improvement at the lower size market
ie. 1500 - 3000 sq ft both leasehold and freehold. Increase in
demand for owner occupier market in the same size bracket.
Lack of supply of freeholds in this area. Larger offi ces with 5000sq ft
+ fl oor plates may struggle and alternative uses may be considered.
Retail high street demand low, secondary demand increasing.
James Perry, Cardiff , Property Consultants, jperry@middletonperry.
co.uk - Predominantly deal with industrial property and whilst
demand has reduced slightly over last 6 months, it is still strong and
outstripping supply for all but the largest properties.
Michael Bruce, Cardiff , DLP SURVEYORS, michael@dlpsurveyors.
co.uk - Still plenty of market activity although a noticeable slowing
down over the last 3 months or so. Development start ups in South
Wales continue to be few and far between - particularly noticeable
when comparing with other bordering areas such as the South West,
West Midlands, and North West. A particularly worrying tone is the
apparent reluctance of developers to consider South Wales, many
apparently being put off by the perceived ‘anti-business’ sentiment
being expressed by Welsh Govt.
Richard Baddeley, Glan Conwy. Colwyn Bay, Richard Baddeley &
Company, richardbaddeleyco@gmail.com - There is considerable
uncertainty and caution in the commercial market generally and
particularly in North Wales. The market is awaiting a decision on the
Wylfa Nuclear Proposal and development within Holyhead to cater
for the growing Irish freight traffi c.
Robert James Harrison, Welshpool, Triang Developments Ltd,
j.harrison@triang.co.uk - Remains shortage of industrial buildings
for business growth in parts of Wales due to lack of availability of
development land and high construction costs.
Stuart R J Phillips, Oswestry, Celt Rowlands & Co, oswestry@
celtrowlands.com - Industrial remains strong and appears to have
seen a surge upwards in rents in last 6 months.
West Midlands
Chris Keye, Birmingham, Darby Keye Property, chris.keye@
darbykeye.co.uk - Occupational demand in Q4 2023 appears to
have improved slightly but capital market transactions remain
challenging.
Christian Smith, Birmingham, Savills, christian.smith@savills.com
- The industrial market remains ok, close to pre-covid average,
incentives are pushing out but rents are still slowly rising. In my
view available units on the market have about peaked as little new
development is currently coming through. Expect market to be
slightly stronger as next year unfolds.
David Macmullen, Sambourne Redditch, MacMullen Associates Ltd,
dmacmullen@macmullenassociates.com - More optimism apparent
in the market than possibly is justifi ed. There is no great overhang
of new stock but secondary and second hand offi ce and retail
properties are burdensome to landlords when vacant because of
void rates and service charge. The level of potential insolvency in the
construction sector is concerning.
David Willmer, Birmingham, Avison Young, david.willmer@
avisonyoung.com - The Industrial/logistics market has softened over
the past 12 months but is still active and in line with the 5yr average.
UK COMMERCIAL PROPERTY MONITORECONOMICS
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Tony Rowland, Evesham, Sheldon Bosley Knight, trowland@
sheldonbosleyknight.co.uk - Its a tough trading market suff ering
from occupier uncertainty. When interest rates stabilise, I am sure
we will see increased business activity.
Yorkshire & the Humber
Andrew Mcbeath, York, McBeath Property Consultancy Limited,
andrew@mcbeathproperty.co.uk - Flat market but due partly to
seasonal lethargy.
Brian Reynolds, Wakefi eld, NorthCountry Homes, brian@
northcountryhomes.co.uk - As a low cost house builder the buying
market is looking good, providing opportunities if not hamstrung
for cash. Sales are low cost, so will stand up, demand is high and will
remain so now the interest rate change has been ‘accepted’.
David Broschomb, Leeds, Dabro & Associates, dabroandco@gmail.
com - The Leisure Market in which I specilise is going through
changes and struggling due to the after aff ects of the Pandemic,
Business Rates, Cost of Food, Utilities and Staffi ng. This will aff ect
investment, property availability and values.
David Melvyn Woodhead, Wakefi eld, Woodhead Investment &
Development Services Ltd, dwoodhead@woodheadinvestments.
co.uk - High cost of borrowing is revealing a two tier market. Debt
laden buyers are inactive / generally selling whilst cash purchasers
are still active. Not seeing any signifi cant “forced sale” events (yet).
Jason Barnsdale, South Yorkshire, Barnsdales, jason@barnsdales.
co.uk - Lack of supply of stock is probably artifi cially holding values
steady.
Jonathan Duck, York, Bramall Properties Limited, jonathan.duck@
bramallproperties.co.uk - Quiet.
Michael Hughes, York, MJD HUGHES Ltd, info@mjdhughes.com -
The commercial property market cannot be said to be improving
but there is a sense that is not going backwards. There is a general
positive attitude amongst landlords and freehold buyers who want
to make their business move forward. The extended period of
stagnation or poor returns is helping investors to focus on how this
can be improved. There is no specifi c trend at the moment but there
is certainly a will for improvement.
Mr Richard J Heslop, Leeds, DE Commercial, richard@de-
commercial.co.uk - We are clearly at the bottom of the cycle or very
close to it. Developers, investors and occupiers are clearly waiting
to see what will happen in the wider economy vis-a-vis interest rates
and the ability to access fi nance from the banks.
Richard Corby, Leeds, Lambert Smith Hampton, rcorby@lsh.
co.uk - Deals across all sectors continue to be slow to complete
or frequently fail to transact, but occupier enquiries are still being
received and those parties that can proceed have a better choice
and stronger negotiating position than has been the case over the
last couple of years. The offi ce market is becoming fragmented
between prime space and the remainder, with few takers for the
latter.
Robin Beagley, Leeds, WSB Property Consultants LLP, rbeagley@
wsbproperty.co.uk - Demand from occupiers across all sectors is
subdued, caution remains but limited supply should help maintain
rental and capital values.
UK COMMERCIAL PROPERTY MONITORECONOMICS
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UK Commercial Property Monitor
RICS UK Commercial Property Monitor is a quarterly guide
to the trends in the commercial property investment
and occupier markets. The report is available from the
RICS website www.rics.org/economics along with other
surveys covering the housing market, residential lettings,
commercial property, construction activity and the
facilities management market.
Methodology
Survey questionnaires were sent out on 6 December
2023 with responses received until 12 January 2024.
Respondents were asked to compare conditions over the
latest three months with the previous three months as well
as their views as to the outlook. A total of 850 company
responses were received.
Responses have been amalgamated across the three
real estate sub-sectors (offi ces, retail and industrial) at a
country level, to form a net balance reading for the market
as a whole.
Net balance = proportion of respondents reporting a rise
in a variable (e.g. occupier demand) minus those reporting
a fall (if 30% reported a rise and 5% reported a fall, the net
balance will be 25%). Net balance data can range from -100
to +100.
A positive net balance reading indicates an overall increase
while a negative reading indicates an overall decline.
Contact details
This publication has been produced by RICS. For all
economic enquiries, including participation in the monitor
please contact: economics@rics.org
Disclaimer
This document is intended as a means for debate
and discussion and should not be relied on as legal or
professional advice. While every reasonable eff ort has
been made to ensure the accuracy of the contents, no
warranty is made with regard to that content. Data,
information or any other material may not be accurate and
there may be other more recent material elsewhere. RICS
will have no responsibility for any errors or omissions.
RICS recommends you seek professional, legal or technical
advice where necessary. RICS cannot accept any liability
for any loss or damage suff ered by any person as a
result of the editorial content, or by any person acting or
refraining to act as a result of the material included.
Economics Team
Simon Rubinsohn
Chief Economist
srubinsohn@rics.org
Tarrant Parsons
Senior Economist
tparsons@rics.org
Dong Lai Luo
Senior Economist
dluo@rics.org
Adib Munim
Economist
amunim@rics.org
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