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Insight & Opinion

Demand for UK commercial property continues to rise

Author: Staff

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Earlier this month, it was revealed that quarter one of 2015 had seen stronger levels of investment in commercial property than the first three months of any year in recent times. Now, a study has revealed that demand is remaining high this year, indicating that sentiments are good for the sector, and that it should continue to perform well throughout the rest of the year.

According to the report released by the Royal Institution of Chartered Surveyors (RICS), the early part of this year saw the fastest acceleration in demand at any time this century, approaching the fastest recorded pace of growth in demand ever recorded, from 1998.

The first three months of the year saw the level of investment demand grow for 46 per cent of respondents to the survey. This was the tenth consecutive quarter that the market has seen a rise in the number of RICS members who have seen demand grow.
RICS said that the rate of demand is now at its highest since 1998, adding that there are two main reasons for such a growth in the market. On one hand, a much more balanced level of economic expansion has helped to improve the appetite for investment in commercial units, with buyers much more confident that business activity in the UK will help them achieve strong returns.

In addition to this, RICS said that an increase in the number of overseas investors putting money into the UK commercial property sector had had an impact. In the fourth quarter of 2014, it said, enquiries from overseas investors made up 17 per cent of total enquiries. However, by the end of March, this had reached some 34 per cent.

According to Simon Rubinsohn, RICS chief economist, the strength of the latest commercial property survey is indicative of a sector that will continue to grow throughout the course of 2015.

“What is particularly encouraging is that a better tone to the results is visible in all parts of the country and increasingly in secondary as well as prime space. Given that these indicators have historically provided a strong steer as to the performance of the economy two to three quarters out, it is hard not to be encouraged by the conclusions of this report.”

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