Surge in commercial real estate demand

Demand for commercial property in the UK is growing close to its fastest pace since 1998, according to the Royal Institution of Chartered Surveyors (RICS).

In Q1 2015 the UK saw its 10th consecutive quarterly acceleration of demand for commercial properties, with 46% more respondents seeing greater interest.

In the investment market, enquiries also increased significantly with 49% more surveyors seeing more prospective investors – continuing the trend of rising demand which began towards the end of 2012.

Overseas buyer interest also picked up on the previous quarter, with 34% more respondents seeing more enquiries from overseas investors (17% in the previous quarter).

As availability declines (38% more surveyors are seeing fewer commercial properties on the market) the impact of tighter market conditions on rental expectations is edging up, particularly across the industrial and office sectors, while retail rental expectations continue to lag behind.

The RICS also points out that its latest survey shows improvements in all parts of the country and increasingly in secondary as well as prime space.