Confidence in the long-term outlook of the commercial property market is growing and a third of agents feel the market has now bottomed out according to the fourth quarter RICS commercial property monitor. While most of the market remains sluggish and lacking momentum, it said there are clear incremental improvements.
Occupier demand remained negative overall at -7 per cent but improved on the -12 per cent seen in the third quarter. Although both the office and retail sectors remain 'relatively weak', sentiment has improved from the third quarter and industrial demand remains positive. Prime property continues to outperform secondary units and the outlook for prime retail rents has stabilised. Meanwhile credit conditions in the sector are much-improved, helped by hopes of lower interest rates.
Sam Kingston at Roche Chartered Surveyors in Norwich said: “The market has remained resilient. Lack of supply continues to prevail across the industrial sector and accordingly rents are rising. The office 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.”
At DTRE in Cambridge, Mike Ayton said: “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 two years of virtual nil supply. As new schemes start, there is still significant occupier demand generating early interest.”
Separately, one of the largest warehouse premises to be offered to let in Norfolk for some years has been launched onto the market. Units 6&7 at Shipdham Airfield Industrial Estate provide nearly 60,000 sq ft in one unit, and over 32,000 sq ft in the other and are being offered to let together or individually may be considered. Built in the 1980s, the warehouses have six metre eaves and are fitted for around 7,000 pallets. Guy Gowing, managing partner of letting agents Arnolds Keys, said, “The market for warehousing in Norfolk is extremely buoyant, with internet retail fulfilment boosting demand, and post-Brexit stockpiling also increasing the need for such buildings....This is the largest warehouse premises currently on the market in Norfolk.”
