In the poorest
reading since 2008, some 85% more respondents expect retail rents to decline,
rather than rise, in the coming three months.
office sector, a net balance of -62% of respondents are predicting a further
fall in rents, worsening from a balance of -24% in the previous quarter.
findings in the RICS UK commercial property survey are the latest signs of a
deterioration in sentiment across several major sectors of the real estate
market, with the economic fallout denting demand from tenants and business.
of respondents envisage businesses scaling back their office footprint over the
next two years as people move to home working.
balance of -55% of respondents also reported a decline in occupier demand.
decline in tenant demand was most felt in retail and office space, with net
balances of -86% and -79% respectively.
a fall was also seen in demand for industrial units, with 13% more respondents
seeing a decline, marking the first time that the industrial series has seen a
negative response since 2012.
Parsons, RICS Economist, commented: “The latest survey feedback unsurprisingly
reflects the significant disruption and uncertainty that emerged across the
economy during the lockdown period. With demand from both occupiers and
investors falling sharply, respondents now anticipate rents and capital values
will come under downward pressure while the market adjusts to a drastically
changed economic environment.
particular, the recent shift into remote-working raises many questions across
the office sector, with respondents expecting businesses to re-evaluate their
office space requirements over the next two years. On a brighter note, the
outlook is already showing signs of recovery across industrial sector, which
remains set to benefit longer-term from an acceleration in the growth of