Brexit inertia is continuing to hinder the commercial property market, according to a survey of property agents across the UK.
The Commercial Market Survey for Q1 2019 from the Royal Institute of Chartered Surveyors, which represents 125,000 property specialists, says Brexit is dampening consumer and business confidence.
In particular, it reports that solid fundamentals in the economy are continuing to drive growth in the industrial sector, but the struggling retail sector shows little signs of improvement.
Overall the survey reports there was a modest decline in occupier demand in Q1, but this was mostly due to the fall in the retail sector, reported by 57 percent of respondents, whist demand for offices was broadly static and demand for industrial/distribution properties continued a steady increase.
Available space on the market rose sharply in the retail sector during Q1, again, an ongoing trend evident over the past 18 months.
There was a slight rise in office availability during Q1, the second consecutive quarterly increase, but available space in the industrial sector continued to fall, although more slowly.
The survey reports an expectation of increasing rents in both prime and secondary industrials over the next 12 months, steady rental growth in prime offices, a possible slight fall in secondary office rents and further falls in both prime and secondary retail rents during the next 12 months.
In the investment market, demand declined for the second successive quarter, particularly in the retail sector, although enquiries for offices also reduced slightly, whilst investment inquiries in the industrial sector remained strong, albeit increasing more modestly than previously.
RICS Survey contributor Andrew Kilpatrick, of Kilpatrick & Co, reported that Swindon’s commercial property market is generally somewhat subdued as the political turmoil around Brexit continues to depress consumer and business confidence.
"Despite the Honda shadow over Swindon, there has been some good news with an 85,000 sq ft warehouse at Dorcan pre-let to DHL," he said.
"Also, Good Energy have been given planning consent to build a new headquarters in Chippenham in the summer."