Demand for retail property beginning to rise in South of England8th November 2013

The UK retail property sector is beginning to feel the effects of the nation’s fledgling economic recovery as demand to rent premises rose in the South during the third quarter of the year, says the latest RICS Commercial Property Survey.

With winter fast approaching, 21 per cent more chartered surveyors reported rises rather than falls in demand for shops. While demand is still historically low, this jump in interest from potential retail tenants does represent a welcome sign that the worst could now be over for the high street. Significantly, every part of the country saw demand for retail space increase with London seeing the most notable growth.

In tandem with this more positive picture for the sector, the amount of new retail space being built across the country also rose slightly (net balance +6 per cent).

There has also been a rise in demand for Office Space, with 34 per cent more surveyors seeing a rise in demand rather than a fall, and in industrial space with 51 per cent more surveyors seeing a rise in demand. These two sectors have also seen a drop in availability in the South pushing rental expectation for the next three months up.

Simon Rubinsohn, RICS Chief Economist, said “The pick-up in the desire to occupy retail space is broadly reflective of the improved trend in high street spending. That does not, however, mean that the big challenges facing the sector have disappeared. Rent expectations are still largely soft away from the South East part of the country and it is mainly in London where the numbers are strongly positive.”