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RICS commercial
property survey - Wales
Tenant demand for commercial property has fallen in Wales, says the latest
commercial property survey from RICS.
Surveyors from across Wales reported occupier demand for office space
fell again, with a third fewer enquiries, sales and lets to commercial
tenants as many businesses put growth on hold to wait for the effects
of the credit crunch on the economy to settle.
However while new office developments across the UK started to decline
for the first time in four years, in Wales work on building new offices
rose by 33%. This is reflected in the Welsh Assembly Government’s
interest in office developments, especially the new regional offices at
Llandudno junction, as well as commitments to offices in Aberystwyth and
existing offices in Merthyr Tydfil.
Across Wales demand for retail space fell by 67% - the largest fall report
across the UK. This reflects the significant declines in demand for retail
space seen across the UK, which is experiencing the fastest decline in
this area for six years. Demand in Wales for industrial space also fell,
corresponding with a rise in the amount of available industrial floorspace.
Across the UK chartered surveyors reported business demand for commercial
property falling in the fourth quarter of 2007, with all sectors reporting
a fall for the first time since Q1 2003. The number of surveyors reporting
a decline in office demand moved
New buyer enquiries also fell across all three sectors having previously held firm against credit market jitters. The retail sector witnessed the sharpest decline in enquiry levels with the greatest number of declines in Central London and Wales. As with demand, the number of surveyors reporting a fall in enquiries fell to the worst level since A1 2003.
Looking forward, surveyors continued to be pessimistic as a bleaker outlook was anticipated across all sectors. Surveyor confidence in the office sector turned negative for the first time since 2003, while in the retail sector, confidence dipped to its lowest point in six years. Rental expectations turned negative for the first time in over four years with surveyor optimism dented across all sectors.
The credit market turmoil continued to have a negative impact on investment into commercial property assets with capital values declining across all areas. Surveyors reported declines in capital values within the office sector as the net balance dropped from – 17.3 to – 47.8%. Recent financial turmoil has seen investors re-price risk. In the retail market the net balance of capital values fell from – 20% to – 48%.