RICS UK Commercial Property Monitor – 2024 Q3 Update
The Q3 2024 RICS UK Commercial Property Monitor provides an in-depth analysis of the UK commercial property market for the third quarter of 2024. Here are the key points:
- Market Overview:
- A general slowdown in the commercial property market, with reduced investment activity and lower rental growth compared to previous quarters.
- There is a notable shift in investor sentiment, with increased caution due to economic uncertainties and rising interest rates.
- Sector Performance:
- Office Sector: The demand for office spaces has declined, particularly in major cities, as remote working trends continue to impact the market. Vacancy rates have increased, and rental values have stagnated.
- Retail Sector: The retail sector remains under pressure, with high street retail struggling due to the ongoing shift towards e-commerce. However, retail parks and out-of-town shopping centers have shown some resilience.
- Industrial Sector: The industrial and logistics sector continues to perform well, driven by the growth of online shopping and the need for distribution centers. Rental growth and investment activity in this sector remain strong.
- Regional Insights:
- The report provides a regional breakdown, indicating that London and the South East are experiencing the most significant slowdown, while some regional markets are showing more stability.
- There is a growing interest in secondary cities and regional hubs as investors seek opportunities outside the capital.
- Outlook:
- The outlook for the UK commercial property market remains uncertain, with economic factors such as inflation, interest rates, and geopolitical events likely to influence future performance.
- The report suggests that investors should adopt a cautious approach and focus on sectors and regions with strong fundamentals and growth potential.
These trends are evident locally with ‘caution’ summing up the market in a single word, part down to investors holding out for further interest rate cuts, and many waiting to see what the Budget would bring (or take away…). Retail remains challenging, although occupier demands is still there if the location is good. The office sector locally is characterised by a shortage of prime stock, while demand for secondary space has declined since the pandemic. Industrial has cooled slightly since the last quarter, although the fundamentals remain robust.
Click below to access the full report:
