Propertymark’s latest Commercial Outlook paints a mixed picture of the sector’s immediate future.
PropertyMark's commercial real estate agent members were asked for their views on demand and supply levels within the industry over the next 12 months, with 50% anticipating an increase in supply and almost a third (31%) predicting a corresponding increase in demand.
In the office sector, 40% expected supply to increase, while 80% expected demand to decrease or remain stable.
In the takeaway sector, 27% of members surveyed expect an increase in both demand and supply, but in the industrial sector, 50% of members expect a surge in demand and 25% expect an increase in supply.
In terms of capital values, sentiment is positive in the land, garden and industrial sectors, but the outlook is much darker in the pubs and restaurants sector, where sentiment has fallen further since the last quarter.
The industrial and land and garden sectors maintain a positive outlook on rent levels, however the office and takeaway sectors remain negative on rent levels.
Finally, 58% of members reported that their rent is increasing following their rent review in the first quarter of 2024. Only 16% reported that their rent is decreasing as a result of their rent review.
Nathan Emerson, chief executive of Propertymark, said: “Member sentiment varies across sectors but we are seeing particularly positive attitudes in the land and garden and industrial sectors.”
“Demand and supply imbalances remain and the pub and restaurant sector in particular continues to be affected by changing trends. However, as the economy stabilises, we remain optimistic about the outlook for the UK commercial property sector.”
Michael Sears, from Propertymark's commercial advisory committee, added: “Demand for city centre retail is still mainly coming from local businesses, but there are some encouraging signs that brands are starting to step up activity. Demand for larger open-plan offices remains low, but demand for smaller offices in business centres is growing again.”
“With [Conservative] With the government's proposals for high street rental auctions due to go on the market from September, details of how this will work will be crucial – to avoid the unintended consequence of lowering prices and rents, and therefore investment and redevelopment in city centres.”