The latest RICS Commercial Market Survey, for Q4 2009, reports improved letting activity for commercial property in Q4, 2009 for the second consecutive quarter.
The improved activity is led by better tenant demand for office and industrial properties, but with retail still lagging behind, with tenant demand still in decline across most regions.
The survey also reports that the rate of increase in vacant space is starting to reduce with the turnaround led by office space in London, where supply declined for the first time since Q4, 2007. The Survey also reports development completions continuing to ease back further and development activity continuing to fall across all sectors, albeit not as fast as previously.
However, confidence in the outlook for future letting activity continues to improve, with the greatest increase in confidence led by the office market, followed by the industrial sector. Surveyors’ rental expectations suggest some improvement in future rental values during 2010 across all three sectors. Also, investment transactions rose at a notably faster pace in Q4.
RICS Survey contributor, Andrew Kilpatrick, partner of Thompsons, commented with regard to the Swindon property market: “Despite market conditions remaining challenging in Swindon’s main sectors of the commercial property market, Swindon has managed to secure some significant deals, the latest of which is the letting of the 170,000 sq ft former Early Learning Centre warehouse at South Marston, the largest warehouse deal of the year.
“Other large space enquiries currently in the market, if secured, may give 2010 a welcome kickstart. However, the level of occupier enquiries dipped during November and any recovery in the commercial property market seems heavily dependent upon improved economic conditions, which, so far, are not looking particularly imminent.
“The usual post Christmas increase in retail properties coming to the market is anticipated, to add to an increase supply from recent casualties such as First Quench/Threshers/Wine Rack/Bottoms Up and Blacks. The continuing scarcity of quality investment properties is holding back increased activity in that market sector,” Mr Kilpatrick said.
