UK Commercial Property Monitor

Commercial

Property

Monitor

Q1 2024

ECONOMICS

Early signs of recovery evident, although the outlook

remains relatively cautious

The Q1 2024 RICS UK Commercial Property Monitor

results show tentative signs that the market is shifting

towards a recovery phase, albeit the current backdrop

remains challenging given the relatively restrictive interest

rate setting alongside structural headwinds. In keeping

with this, the largest share of respondents now view the

market as either having reached a oor for this cycle (35%)

or having entered the early stages of an upturn (38%).

Focussing on the occupier market, the all-sector net

balance for tenant demand came in at +4% in Q1, up

from a marginally negative gure of -7% beforehand. Even

so, the latest reading is consistent with a largely steady

trend, rather than an outright increase at this stage. When

looking at the sector level data, a net balance of +14%

of respondents noted an uptick in occupier demand for

industrial space. As such, this represents the most upbeat

reading since Q3 2022, although it remains some way

below the trend seen in 2021.

Interestingly, a net balance of +6% of contributors saw an

increase in occupier demand across the oce sector in

Q1, marking the rst positive reading for this metric since

early 2022. On closer inspection however, this rise was

entirely driven by Central London, where the net balance

moved from +3% in Q4 to +40% in Q1. Elsewhere, virtually

all other parts of the UK exhibit either a at or slightly

negative trend in oce tenant demand. Drilling further

into the sector, in response to an additional question

included this quarter, 52% of contributors stated that

they have witnessed an increase in the volume of oce

tenants looking to downsize over the past twelve months.

Alongside this, close to 90% of respondents report seeing

either signicant or modest levels of oce repurposing to

other uses of late (up slightly from 86% when this question

was last included in 2021).

For the retail sector, occupier demand remains largely

subdued, although the Q1 net balance of -10% is at least

slightly less downbeat than the gure of -18% seen in the

previous iteration of the survey. In terms of availability,

respondents continue to cite a rise in vacant space across

both the retail and oce sectors at the national level over

the quarter. By way of contrast, availability was reportedly

at for industrials in Q1.

For the coming twelve months, rental growth

expectations moved a little further into positive territory

for both the prime and secondary industrial sectors

relative to Q4 (posting net balances of +56% and +22%

respectively). Likewise, prime oce rental projections

were also upgraded, with a net balance of +42% of

• Headline capital value expectations stabilise over the quarter

• Signicant divergence seen in oce occupier demand trends across Central London

compared to the rest of the UK

• Majority of respondents feel the market has either reached a oor for this cycle or started

to recover

rics.org/economics

respondents now anticipating an uplift in rents vs +30%

previously. Conversely, rents are still seen falling across

secondary oces over the year ahead (net balance -36%).

For the retail sector, prime rents are seen holding steady

over the next twelve months (net balance +3%), although

secondary retail rents are still expected to fall a little

further according to a net balance of -42% of contributors.

These trends are broadly replicated across the regional

data, with the only noteworthy distinction being that

Central London prime oce rental projections are

rmer than the national average, at +54%. Moreover, this

represents the strongest outlook for CL prime oce rents

since Q1 2016.

In the investment market, the headline demand gauge

moved into neutral territory, posting a net balance of -4%

relative to a more negative reading of -19% last quarter.

Even so, the picture remains varied at the sector level,

with only the industrial sector seeing a rise in investment

enquiries during Q1, evidenced by the net balance picking-

up to +14% from +2%. Meanwhile, buyer demand is still

struggling for momentum in the oce and retail sectors,

albeit the Q1 net balances of -14% and -18% are a little

less subdued than those seen last quarter (-32% and

-34%). With respect to international investment demand,

a at to modestly negative trend was noticed across all

mainstream sectors.

In terms of the outlook for capital values, respondents

appear to have solid conviction that prime industrial

assets will see some capital value appreciation over the

year to come (net balance +54%), while primes oce

values are also seen rising (net balance +25%). Secondary

industrial properties are anticipated to deliver a more

modest uplift in values (net balance +14%), with prime

retail values seen holding relatively steady (net balance

+5%). At the weaker end of the spectrum, respondents

expect capital values to continue to slip across secondary

oce and retail markets over the next twelve months.

Looking at some alternative sectors, twelve-month capital

value projections are rmly in positive territory for life

sciences, student housing, aged care facilities and data

centres (with all sectors displaying net balances above

+46%). On the same basis the outlook is also positive,

though to a slightly lesser degree, across multifamily

residential (net balance +38%) and for hotels (net

balance +24%). Meanwhile, leisure capital values exhibit

a marginally negative twelve-month assessment, posting

a net balance of -10% (slightly weaker than the reading of

-6% registered last quarter).

UK COMMERCIAL PROPERTY MONITOR

ECONOMICS

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Commercial property all-sector average

-80

-60

-40

-20

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Net balance %

-60

-40

-20

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Net balance %

-80

-60

-40

-20

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Net balance %

-40

-20

100

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Net balance %

Occupier demand Availability

Rent expectations

Inducements

-100

-80

-60

-40

-20

2006 2008 2010 2012 2014 2016 2018 2020 2022

Net balance %

-100

-80

-60

-40

-20

2008 2010 2012 2014 2016 2018 2020 2022

Net balance %

Investment enquiries Capital value expectations

UK COMMERCIAL PROPERTY MONITOR

ECONOMICS

rics.org/economics

-100

-80

-60

-40

-20

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Office

Industrial

Retail

Net balance %

-60

-40

-20

1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023

Office

Industrial

Retail

Net balance %

Occupier demand

Availability

Commercial property - sector breakdown

-100

-80

-60

-40

-20

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Office

Industrial

Retail

Net balance %

Rent Expectations by Sector

-60

-40

-20

100

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Office

Industrial

Retail

Net balance %

-100

-80

-60

-40

-20

2006 2008 2010 2012 2014 2016 2018 2020 2022

Office

Industrial

Retail

Net balance %

-100

-80

-60

-40

-20

2008 2010 2012 2014 2016 2018 2020 2022

Office

Industrial

Retail

Net balance %

Rent expectations Inducements

Investment enquiries

Capital value expectations

UK COMMERCIAL PROPERTY MONITOR

ECONOMICS

rics.org/economics

-100

-85

-70

-55

-40

-25

-10

Prime Office Secondary

Office

Prime

Industrial

Secondary

Industrial

Prime Retail Secondary

Retail

Average

Q4 2023

Q1 2024

Net balance %

-65

-50

-35

-20

-5

100

Prime Office Secondary

Office

Prime

Industrial

Secondary

Industrial

Prime Retail Secondary

Retail

Average

Q4 2023

Q1 2024

Net balance %

Very Cheap Cheap Fair Value Expensive Very Expensive

Q4 2023

Q1 2024

% of Respondents

Early Downturn, 8%

Mid-Downturn, 15%

Bottom, 35%

Early Upturn, 38%

Mid-Upturn, 3%

Peak, 1%

% of Respondents

12-month capital value expectations

12-month rent expectations

Market valuations

Property cycle

Commercial property - additional charts

-20

-10

Multifamily Hotels Data centres Aged care

facilities

Student

housing

Leisure Life science

Q4 2023

Q1 2024

Net balance %

12-month capital value expecations alternatives 12-month Rental expecations alternatives

-20

-10

Multifamily Hotels Data centres Aged care

facilities

Student

housing

Leisure Life science

Q4 2023

Q1 2024

Net balance %

UK COMMERCIAL PROPERTY MONITOR

ECONOMICS

rics.org/economics

East Midlands

Brendan Bruder, Northampton, Abbeyross Chartered Surveyors,

[email protected] - Even with a bit more appetite for

lending, cash deals prevail. Distress continues in leisure and

pubs though recovery evident in mid market F&B. Very few

international enquiries beyond BTR and prime industrial.

David Meghen, Yardley Hastings, Meghen & Co, david@meghen.

co.uk - Poor as developers are waiting for the next general

election and the market is weak.

David Smith, Northampton, Drake & Partners, dsmith@

drakeandpartners.co.uk - We are seeing a recovery in market

demand and values, with the latter being further fuelled by

a critical lack of stock in all employment use sectors. This will

remain the case unless or until a government sorts out a planning

system that is no longer t for any purpose whatsoever and

further realises that they not only need to xate on where people

live but also where they are going to work.

David Tate, Chestereld, Copelands, djt@copelands-uk.co.uk -

Interest rates need to come down sooner rather than later.

Eamonn Devine, Bedford, Bedford Borough Council, eamonn.

devine@bedford.gov.uk - Apart from industrial, all very at.

Ian Mcrae, Northampton, Chadwick Mcrae, [email protected]o.uk -

The amount of “grey” warehouse space (pallet locations available

on a exible basis) on the market is now at record levels, with

one broker reporting the highest ever level of availability at what

equates to 50,000,000 sq. ft. in England & Wales alone. This is

one broker’s availability, not what the whole market has available.

John Chappell, Skegness, Chappell & Co Surveyors Ltd, john@

chappellandcosurveyors.co.uk - Early shoots of recovering

interest but values still sluggish.

Nigel J.B Carnall, Sutton In Asheld Ng17 1Da, W.A.Barnes Llp,

njbc@wabarnes.co.uk - The market is static for most purposes.

Simon Ives, Market Rasen, Simon Ives Ltd, simon@simonives.

co.uk - The market is pretty at. Decent mid-size industrial

space is available but choice is limited and landlords often face

letting cheaply or not at all. That doesn’t stop ‘aspirational’ rental

expectations though. Those, in turn, are self-defeating as only

those occupiers who have to move are opting to do so; those who

have a choice don’t.

Steven Magorrian, Milton Keynes, Kirkby Diamond, stevenm@

kirkbydiamond.co.uk - Likelihood of interest rates coming down is

helping.

Eastern

Je Fuller, Norwich, OA Chapman & Son Ltd, jedfuller@hotmail.

com - Real issues emerging in hospitality sector where pressure

on tenants is increasing signicantly. Loss of supply in residential

rental sector driving rents higher. Prime industrial with multiple

income streams becoming investment of choice.

Sam Kingston, Norwich, Roche Chartered Surveyors, samk@

rochecs.co.uk - The oce and industrial market has been

relatively subdued at the start of 2024. There is activity at the

smaller end of the market, but larger requirements are limited

and occupiers more cautious. Freeholds do continue to sell,

due to scarcity and value for money, set against the cost of new

property values.

Stephen David Scott-Fawcett, Ely, Martin & Mortimer Ltd,

stevescottfawcett1@gmail.com - Steady recovery in most sectors

with light industrial still strongest. Oce sector static with slight

growth noted in prime retail sector.

William Clarke, Cambridge, Biomed Realty, wbc5380@hotmail.

com - Slowing levels of occupational demand generally but still

stable. I suspect rents will plateau on life sciences side, and

oce sectors will remain static for 12 months. Secondary stock,

location etc will nd life dicult.

London

Adrian Tutchings, Orpington ,Kent, Linay’S Commercial Ltd,

commercialproperty@linays.co.uk - The market remains at .

Oce enquiry levels very poor. Secondary mixed use investment

market in a price band up to £1,000,000 is encouraging.

Andrew Cohen, Central London, Amshold Group Limited,

andrew@amsprop.com - For the right product there is good

tenant demand otherwise the market is subdued.

Andrew Dobson, London, BCM Real Estate, adobson@bcmre.com

- Stagnation due to pending general election.

Ben Preko, London, Salter Rex LLP, bp@salter-rex.co.uk - Market is

generally stagnant at the moment.

Christopher Lacey, London, Sir Richard Sutton Limited,

Christopher@srsl.co.uk - Whilst oce demand is returning

gradually in Central London, with interest rates unlikely to come

down before the Summer and the cost of living weighing on the

UK (coupled with UK and US election uncertainty), I expect the

property market to remain benign for 2024.

Giles Veitch, London, Dwyer Property, giles@dwyerproperty.

com - The market growth over last 10 years was all fuelled

by cheap debt and quantitative easing. Surplus cash from

geared investment will dry up and many will be underwater on

valuations.

Javier Lauret, London, Hurford Salvi Carr, javier.lauret@h-s-c.

co.uk - Secondary oce rents remain depressed with very

weak demand. Some oce space is now being absorbed by

educational, creative, design and medical sector occupants taking

advantage of very attractive rents.

John Graham, London, Douglas Advisory Ltd, j.graham12@icloud.

com - Upcoming budget, BOE interest rates, ination %, National

Gov elections will all impact the marketplace this year.

John Knowles, London, Colliers, [email protected]

- Market still very lethargic apart from super prime and is

becoming more polarised on a daily basis.

John Stacey, London, BC Capital, jstacey@bccap.com - Capital

markets are still not functioning, supply side slowdown in terms

of overall development pipelines, patchy occupier markets but a

ight to quality does appear to exist. Industrial rental growth has

now normalised. Rental residential looks an interesting sector

and should deliver rental growth due to supply side constraints,

planning etc. No widescale distress but this may change as

renancing events approach.

Kamil Chowdhury, London, Petrichor Property Consulting

Limited, kamil@petrichorproperty.co.uk - Expecting to see

more feasibility work on the conversion of secondary oces to

residential through PD development rights.

Mac Lal, London, Macneel, maclal66@gmail.com - Tough market

linked to interest rate environment and weakness of UK economy.

Mark Howard, London, Doherty Baines Limited, mhoward@

dohertybaines.com - Low volumes of transactions for investment

and leasing across oce and industrial sectors.

Mike Penlington, London, Kel Computing Ltd, mike.penlington@

kel.co.uk - Tentative signs of recovery.

Chartered surveyor comments

UK COMMERCIAL PROPERTY MONITOR

ECONOMICS

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Neil Miller, London, Lawrence Vacher Llp, neil.miller@

lvpsurveyors.co.uk - Uncertainty in the current times.

Nigel Harrison, London, Harrison Leggett, nh@harrisonleggett.

co.uk - Central London best in class oces remain in demand with

rents peaking. Flexi Oce oerings are now seeing competitive

terms being openly suggested in some areas which implies

potential over supply of this type of property.

Robert Bowden, London, Bentinck Estates Llp, robert.bowden@

bentinckestates.com - Only when interest rates move will the

market move.

Rod Bowers, London, Hamburg Commercial Bank, rod.bowers@

hcob-bank.com - Overall market is stabilising.

Sean Dempsey, London, Boultbee Ldn Capital Ltd, sean@

boultbeeldn.co.uk - In anticipation of lower ination and

subsequently lower interest rates, there is denitely a feel

of imminent change. However, condence remains low and

fundamentals such as high development costs will continue to

suppress activity. Conversely, a lack of Grade A and Prime supply

and the recent period of ination, may result in an earlier than

expected growth in rents.

Simon Laker, London, Vive Re Advisory, Slaker@vivereadvisory.

com - Market conditions remain challenging in the oce sector,

with increasing use of hybrid working and landlords needing to

address buildings that in many cases are not t for purpose or

need repositioning. There continues to be strong tenant demand

for good quality new or refurbished oces that are centrally

located in cities close to transport infrastructure and amenities.

Constrained supply levels will result in upward pressure on rents

and capital values despite challenging nance conditions.

Steven Gray, London, Global Mutual, Sgray@globalmutual.com -

Challenging.

Thomas D Whirledge, London, David Whirledge, david@

whirledge.com - The industrial market looks over priced in rental

terms with the aect of huge increases in rates not yet ltering

through.

Tim Edghill, London, Space Asset Services Limited, Tedghill@

spacedevelopments.org.uk - I think there is a general view that we

are at the bottom of the market cycle wise, however, nervousness

remains. First, because with a fragile global economy it is unclear

how long we will be at the bottom and second because vendors

and owners still have an unrealistic view of asset value and so

values need to drop before a more active trading market will be

realised.

Tony Parrack, London, TP Consult, tonyparrack@tpconsult.co.uk

- I specialise in oces in and around the West End. There is still

a lack of larger oors in prime locations. Second-hand space is

usually allied with leases that have too short a period of time to

review or expiry which combined with what may at rst appear to

be a good quality tout, but does not comply with current needs

for Zoom rooms, collaborative spaces and other post-Pandemic

requirements makes these spaces unattractive. There is a move

away from WFH to hybrid and even full-time oce.

Tristram Frost, London But Dealing Mainly With Western

Europe, Atlas Property Advisors, twtfros[email protected] - Still

signicant gaps between vendors and buyers expectations in

many cases but activity gradually improving.

W Nicol-Gent, London, Killochan & Co, louanna@blueyonder.co.uk

- An ostrich like approach continues in many areas.

William Spencer, London, Vectis Property Group, william_

spencer@live.com - Things appear to be in suspense while we

wait for the rst drop in interest rates. That will cause a urry of

activity.

North East

Andrew John Wilby, Wakeeld, Cliord Lax/Y.I.Ga., andrew.wilby@

cliord-lax.co.uk - Until the supply of money for commercial

property eases and margins become sensible for borrowers,

commercial property is going nowhere fast. The public sector

can’t drive the market forever.

David Downing, Newcastle Upon Tyne, Sanderson Weatherall Llp,

david.downing@sw.co.uk - Investment market remains relatively

strong, but still limited transactions, as nance rates remain

high and banks are increasingly selective on the deals they want

to fund. Market still very keen on long term income. Occupier

market a bit more unsteady, with the prospect of a general

election in the next 12 months, there is the usual uncertainty

about what impact a new government (and probably a Labour

one) will have on the property market.

Gavin Black, Newcastle Upon Tyne, Naylorsgavinblack

LLP, gblack@naylorsgavinblack.co.uk - There a number of

uncertainties in the market which are aecting decision making

and creating a potentially negative set of conditions that support

waiting to reach a conclusion before action.

Gerard Darby, Hartlepool, Hartlepool Borough Council, gerard.

darby@hartlepool.gov.uk - Flat.

Helen Wall, Sunderland, Bradley Hall Sunderland, Helen.wall@

bradleyhall.co.uk - Appetite for retail investments is generally low

though owner occupiers are starting to gain market condence

again after a quiet H2 2023.

Kevan Carrick, Newcastle Upon Tyne, JL Property Consultants

LLP, kevan@jkpropertyconsultants.com - Development will

proceed with bespoke occupiers but otherwise speculative

development is unlikely until economy improves with consequent

improvement in the level of demand. The disposal of space is

taking longer but enquiries are continuing albeit at a slower pace.

Yet to see an improvement of condence in the market. There are

opportunities to be considered.

Simon Haggie, Newcastle Upon Tyne, Knight Frank Llp, simon.

haggie@knightfrank.com - The rst quarter of 2024 has been

fairly subdued although there are some early signs of greater

condence amongst businesses/occupiers.

North West

Andrew Ellis Leah, Burnley, Burnley Borough Council, aleah@

burnley.gov.uk - Currently depressed with occasional aberrations

resulting from ill advised external investors from other (less

depressed) regions.

Andrew Taylorson, Preston, Eckersley Property Limited, at@

eckersleyproperty.co.uk - Market activity is still frustrated by a

limited supply of stock particularly in the industrial and trade

counter sector maintaining strong capital values. The residential

land market is also active but land values are depressed due to

the heavy burden associated with Planning Gain, Part L costs and

BNG with vendors not inclined to sell. Viability is an issue due to

a broken planning system and delays exacerbating holding costs

and bringing uncertainty into the market.

Brian Bailey, Manchester, Edmundson Electrical Limited, brian.

bailey@propertyservicecentre.co.uk - Still challenging in various

sectors.

Daniel Harris, Manchester, Daniel Harris And Company, dh@

dh-property.co.uk - Slowdown in oce enquiries. Majority of

enquiries sub 1,500 sq. ft. Wider variety of users now looking for

oce space.

UK COMMERCIAL PROPERTY MONITOR

ECONOMICS

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South East

Alex Medhurst, Chichester, Medhursts Commercial Surveyors,

alex@medhursts.com - Pretty at local market currently. After

an encouraging start to January, this has tailed o and election

uncertainty is expected to stall decision making later in the year.

Colin Brades, Brighton & Hove, Avison Young, colin.brades@

avisonyoung.com - Brighton: The prime and good secondary

retail sectors appear relatively stable heading into Q2 with

some indication of a slight increase in demand for both. Static

rents and little movement in tenant concessions being granted

since Christmas. Similarly, there has been limited movement in

occupancy rates during Q1.

Darren Bradley, London/SE, Cromwell Holdings, dcb@park-place.

co.uk - Too much optimism in the expectation of the speed and

magnitude of future reductions in interest rates.

David Holt, London/SE, Why Property Investment Ltd, dh@why50.

com - As always there are pockets in the market where there is

strong demand for the right product.

David Lodowski, High Wycombe, Chandler Garvey, DL@

chandlergarvey.com - Oces and retail relatively stagnant, some

oce availability expected to hang around for some time. Retail

struggling in areas without well-o demographics. Industrial

continues to be in high demand and under supplied.

David Martin, Brighton, SHW, dmartin@shw.co.uk - The oce

market in the City has remained strong for grade A stock, with

new buildings in particular attracting high levels of interest,

pre- completion. Industrially, supply remains an issue with good

demand but occupiers are now taking longer to commit. In the

retail sector, the strongest demand is being shown by local

independents. The acquisition of Churchill Square shopping

centre by IKEA will be a boost to the retail sector in the City, going

forward.

Iain Steele, Farnham, Park Steele, iain@parksteele.com - After a

sluggish start to the New Year, enquiries have picked up with an

increase in viewings. The legal process continues be frustratingly

slow and causing issues with transactions. Industrial remains the

star performer but retail independents are still on the acquisition

trail.

Ian B. Sloan, Banbury, Bankier Sloan, reception@centre-p.co.uk

- The demand for industrial units of under 10,000 sq. ft remains

strong in North Oxfordshire and the North Cotswolds. With this

sector of the economy still improving and no new industrial

developments of this size being under-construction, rents will

continue to rise as demand strengthens as we progress through

2024. Retail rents in the tourists towns of the North Cotswolds

have held up well as the tourist seasons appears to lengthen

year-on-year.

John Jeery Hempton, Lymington, Property Consulatncy, jjh@

hemptonfranks.co.uk - Continuing political uncertainty, world

instability, economic diculties, all contribute to caution in the

property market and lack of new enquiries.

Julian Scannell, Chatham, Watson Day Chartered Surveyors,

julianscannell@watsonday.com - Overall, the markets in

which we have an involvement - light industrial/warehouse/

distribution, oces and secondary/tertiary retail, have remained

reasonably stable, in terms of rental/capital values, supply, new

developments etc. We have seen the level of return required

by investors increase, which is unsurprising in view of the 14

successive increases in bank rate over the past 2 years. That has

increased the cost of borrowing signicantly, which is reected in

investment yields.

Jody Lauder, Rp Taylor Chartered Surveyors, Lancaster, Richard

P Taylor Chartered Surveyors, jody@rptaylor.co.uk - The

constraints of readily available development land and the political

machinations that Lancaster City Council suers means that

commercial development is entirely limited, a predominance for

residential development leads whilst the district continues to be a

net exporter of professional labour.

Keith Mitchell, Lake District National Park, Edwin Thompson,

k.mitchell@edwin-thompson.co.uk - In both agency and valuation,

there appears to be signicant variance in opinions of value due

to a mixture of market uncertainty, limited transactional activity

and disparate views of where in the property market cycle we

currently are.

Kevin Tobin, Manchester, Jacobs, kevin.tobin@jacobs.com - Big

corporates are moving to smaller, prime oce locations with high

spec reception and meeting areas with minimal back oce space.

Mark Cullen, Skelmersdale, Stonegate Group, mark.cullen@

stonegategroup.co.uk - Market is still coping with the current

economic conditions and lack of Government assistance.

Investors are there but the condence to commit and invest is on

hold.

Martyn John Garner, Stockport, Cheshire, Garner + Sons,

martyngarner@garnerandsons.co.uk - The market generally

has remained fairly static over the past three months, across all

sectors in which we are active. However, there are encouraging

signs of increasing and improving condence in property

generally and I would expect to see strengthening demand with

rising rentals and prices over the next twelve months or so.

Mike Fisher, Lancaster, Fisher Wrathall Commercial, mike@

fwcommercial.co.uk - There is still a signicant lack of supply

of small to medium size industrial units. This is constraining

economic growth in the local area.

Neil Lovell-Kennedy, Manchester, Proxmity, neil@weareproximity.

co.uk - Static.

Richi Peters, Liverpool, The UpCo, richi@theupco.co.uk - Banks

have a lot to answer for the state of the UK. Seems they have shut

up shop.

Simon Adams, Kendal, Peill & Company, simon@peill.com -

General enquiry levels have increased in Q1 2024 across all

sectors of the market.

William Madada, Manchester, Jacobs, william.madada@jacobs.

com - There is a decline in property prices for residential premises

of up to 3% on average, oce take up has seen some signicant

downfalls. The expanding of planning uses has yet to show an

upside for retail premises.

Northern Ireland

Arthur Connell Nugent, Newry, Young -Nugent, achn488@

outlook.com - Industrial space holds the oor at present. Oce

and retail space is seeing poor demand.

William Mcfarland, Enniskillen, Eadie, Mcfarland & Co. Ltd,

william@eadiemcfarland.co.uk - Good.

Scotland

David, Helensburgh, Argyll & Bute Council, David.Allan@argyll-

bute.gov.uk - Home working continues to have a signicant

inuence on the oce market with more oces now surplus.

Denis Batts, Edinburgh, Denis Batts Property Consultants,

denis@chl.uk.com - A degree of uncertainty over the state of the

economy and the forthcoming general election.

UK COMMERCIAL PROPERTY MONITOR

ECONOMICS

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Anne Brennan, Poole, Sibbett Gregory Chartered Surveyors,

anne@sibbettgregory.com - Some signs of growth and condence

in certain sectors with diculties continuing in others. This is

driven by the shortage in both oce and industrial sectors.

Industrial market softening following long period of extensive

rental and capital growth.

Antony Milton, SW, Exeter City Council, TonyMiltonPlease@gmail.

com - Market in the doldrums in anticipation of election and

changes to planning and economy.

Bryan Galan, Dorset, Mellawood Properties Ltd, bryan.galan@

outlook.com - Apart from the residential sector, I see a further

drop in values and rents in oces, and retail. Industrial units will

have a modest increase.

Chris Wilson, Poole, Goadsby, chris.wilson@goadsby.com - We

may see some rental/price growth for new industrial as occupiers

realise that if they want new high quality ESG compliant buildings

then there is a substantial premium to be paid since developers

need to charge more to make their appraisals work following the

rise in the cost of materials and yields softening.

Damian Cook, Exeter, Stratton Creber Commercial, damian@

sccexeter.co.uk - There is reasonable demand for correctly priced

property and signs of recovery in the market. The oce market

remains challenging. Industrial demand has tailed o with still

limited supply. Secondary retail is healthier than nationally

reported.

Elizabeth Birchley, SW, Evolve Fund Services Ltd, ebirchley@

evolvefs.co.uk - I think the election will have an impact on market

sentiment.

Gary Lucas, Dartmouth, GSL Advisory, glucas119@btinternet.com

- Due to the nature of existing stock in the region, upgrading to

meet new environmental standards in some sectors, particularly

housing, will be challenging.

Heather Peel, SW, Segro, heather.peel@segro.com - Investors are

carefully considering the latest UK ination data and look forward

to Fed’s policy announcements but there is a slight increase of

positive sentiment which, coupled with signs of early recovery,

are helping drive rents slightly up.

Huw Thomas, Chippenham, Huw Thomas Commercial., huw@

huwthomascommercial.com - Prime retails in High Streets and

shopping centres continue to struggle, but secondary retail

has strong demand from local independent traders. Lots of

developer demand seeking vacant oce buildings for conversion

to residential use. Increase in demand for traditional oce use.

Industrial / warehouse market remaining static.

Ian Knight, Bristol, Homes England, ian.knight@homesengland.

gov.uk - The appetite for additional student housing in Bristol

appears to be insatiable.

Ifan Rhys-Jones, Plymouth, Listers Property Consultants, IFAN.

RHYSJONES@BTINTERNET.COM - Increase in supply, particularly

of oce stock and thinner demand across all sectors we deal

with.

Jan Merriott, Dorchester, Symonds And Sampson, jmerriott@

symondsandsampson.co.uk - Some optimism creeping back

despite election year. Maybe this is because we have factored in a

change of government already rather than uncertainty?

Jon Stone, Exeter, Jon Stone Surveyors Ltd, jon@jonstone.co.uk -

Steady as you go.

Michael Oldrieve, Exeter, MO, m.oldrieve@btinternet.com - Steady

as she goes.

Martin Black, London/SE, Black Stanniland, mblack@

blackstanniland.com - High interest rates and levels of ination

are continuing to adversely aect business condence. The

prevalence of hybrid and exible working patterns is resulting in

central London retail beneting from oce worker footfall on 3

days of the week. However, local retail locations in the suburbs

near to transport hubs are beneting from new exible working

patterns. A number of our clients are converting oce space to

residential both in central London and home counties.

Mr Peter Brown, Kings Langley, Brasier Freeth, peter.brown@

brasierfreeth.com - Oce enquiries increasing with focus on very

best stock-parking less critical.

Nicholas Richardson, London/SE, Montagu Evans Llp, nick.

richardson@montagu-evans.co.uk - There is an increasing

allocation of capital and depth of buyer pool targeted to out of

town retail and supermarket investments, with a lack of suitable

stock. This, combined with easing interest rates and a generally

robust occupational market, should provide the conditions for

yield compression as the year progresses.

Nicholas Threlfall, Chatham, Watson Day, nickthrelfall@

watsonday.com - Getting tougher after a long very good run.

Nick Hanson, Farnham, Vospers Friend & Falcke (Incorporating

Emberson & Co), nick.hanson@vospers.net - Clear evidence

that activity is being restricted awaiting outcome of election -

whenever that may be.

Nigel Riley, Woking, Citicentric, [email protected]

- Hopefully we are at the bottom of the cycle. Small retail

businesses setting up but only paying low rents. Larger retail

units very dicult to let. Many oces being marketed for

refurbishment or conversion.

Oliver Quinn, Henely On Thames, Simmons & Sons Surveyors,

oquinn@simmonsandsons.com - Stagnant.

R Deavall, Chichester, Robert Deavall Associates Ltd, rob@rdal2.

co.uk - Very early recovery across most sectors.

Richard Harding, London/SE, Bray Fox Smith, richardharding@

brayfoxsmith.com - Modest increase in oce demand in

the South East in Q1 2024 but take up will be disappointing.

However, I expect Q2 take up to improve with a number of large

transactions under oer.

Russell Francis, London/SE, Colliers International, russell.francis@

btinternet.com - Investors anticipating lower interest rates and

trying to purchase ahead of a capital market upturn.

Simon Browne, Brighton, Crickmay Chartered Surveyors, scb@

crickmay.co.uk - No considerable change over past 3 month.

Agent asking prices often appear high.

Stephen Ray, Redhill And Reigate, SHW, sray@shw.co.uk - Market

more subdued than the previous quarter except for industrial

generally speaking.

Tim J A Davis, South Coast, Hargreaves, timjadavis@gmail.com

- Improved condence over the quarter and a slow unwinding

of gearing enabling the typically lower geared long term players

to make selective moves. Rain hasn’t stopped play but some

sunshine would help!

South West

Andrew Kilpatrick, Swindon, Kilpatrick & Co Commercial Property

Consultants Limited, A.Kilpatrick@kilpatrick-cpc.co.uk - Swindon’s

market has been generally subdued in Q1 2024 thanks to general

economic conditions and the wet weather. Whilst activity has

started to pick up recently, there’s no sign of a pre-election boom.

UK COMMERCIAL PROPERTY MONITOR

ECONOMICS

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Raman Thakur, Birmingham, Property Letting, ramanthakur@

birmingham.gov.uk - All in all it has been another good year

for the industrial market with shed space being let. Secondary

oce space is now becoming vacant and developers are buying

investments with the proposal of securing planning to convert

oce space into apartments or student accommodations. High

Street Retail is improving slightly as more and more people return

to work.

Richard David Calder, Birmingham, The Manager, richard@

calderssurveyors.com - Industrial and warehousing remains the

strongest sector with continuing but slowed growth in rents and

capital values.

Richard Topps, Stratford Upon Avon, NFU Mutual, richard_topps@

nfumutual.co.uk - We are at a key point in the UK property cycle.

Investors need to see some prospects for positive returns but

economic and global politics still loom over general condence

levels in the market. There are some early signs that some

sectors are now at the bottom and opportunities for growth are

returning.

Yorkshire & the Humber

Andrew Morton, Jersey (Residence) And Companies In Uk And

Jersey, Kamel Properties Limited, a.morton@me.com - I believe

that considering the limited growth in the property market in

recent years and the high levels of ination in other areas of

the economy, property prices in real terms are now low, when

considered as part of a normal property cycle. Therefore, the

property sector is likely to experience an upturn in prices as

interest rates are reduced as the Bank of England gradually drop

their rates due to lower ination numbers.

John Hornsby, York, John R Hornsby Chartered Surveyors, info@

johnrhornsby.co.uk - I operate on a small scale mostly in the

secondary commercial market and mostly retail. I have not seen

any signicant changes to rental or capital values either way over

the past 3 months and do not anticipate any major shifts over the

coming year. Tenant demand however remains steady.

Mr Richard Heslop, Ilkley, DE Commercial Ltd, richard@de-

commercial.co.uk - With the prospect of interest rates having

peaked and ination under control, there was hope of an upturn.

However, with a general election looming and the country

in a mild recession, there is still a lot of uncertainty amongst

occupiers and investors. Furthermore vendors’ expectations of

what their property is worth is out of kilter with the market and

this is hampering activity levels and a potential upturn in the

property cycle.

Neil Daniel, Brighouse, NSD Consultancy, ndaniel@talktalk.net -

Currently stable.

Nicholas Child, Leeds, Wilton Developments Ltd, nick.child@

wiltondevelopments.co.uk - Starting to slowly show signs of

picking up subject to no further disruptions.

Phil Brandreth, Doncaster South Yorkshire, The Conservation

Volunteers, phil.brandreth@tcv.org.uk - Hard times are back

Richard Corby, Harrogate, Lambert Smith Hampton, rcorby@lsh.

co.uk - Completing deals remains a challenge but we are seeing

some occupier clients being more decisive on their relocation

projects due to limited stock in the market and perceptions that

oce and industrial rents will continue to increase.

Robert Austin, Leeds, Robert Austin And Co, robert.austin@

robert-austin.co.uk - We are in a mini recession.

Tony Cole, York, Grafton Land & Property, tcole@graftonlp.co.uk -

Finance costs, living wage increases and energy costs are limiting

growth in the elderly care sector despite growing needs due to

a fast ageing population. Recent softening of energy prices and

potential base rates reduction may generate increased investor,

operator and developer demand in the second half of the year.

Oliver Workman, Cheltenham, THP Chartered Surveyors, oliver@

thponline.co.uk - The start of 2024 has largely continued the main

theme of 2023, where there is signicant caution in the market.

There is however some low level optimism building that the

economy is already out of recession and that interest rates will be

lowering over the course of the year.

Roderick Thomas, Wells, Roderick Thomas Ltd, rdt@

roderickthomas.co.uk - Going upwards this spring.

Scott Rossiter, Exeter, Rossiter Property Consultants, scott@

rossiterproperty.com - All slow. Everyone sitting on hands. Need

a spring bounce but this will be dampened by interest rates not

falling and the overhanging election.

Tim Smith, Exeter, Hitchcocks Group, tim@

hitchcocksbusinesspark.co.uk - Levels of incentives for industrial

leasehold increasing but demand holding up. Secondary oces

struggling and noticeable levels of vacancy for prime city centre

retail.

Tim Wright, Dorchester, Greenslade Taylor Hunt, tim.wright@

gth.net - Market conditions remain fairly stable. We are still

experiencing a lack of good quality industrial stock.

Wales

Chris Sutton, Cardi, Sutton Consulting Ltd, chris.sutton@

suttonconsulting.co.uk - Industrial rents continue to strengthen

for Grade A new-build oorspace at St Modwen Park, Newport

with £8.75 per sq. ft achieved and quoting rents now over

£9.00 per sq. ft. Only three years ago rents on the same estate

were £6.50 per sq. ft. The oce market continues to adapt to

changing working patterns with occupiers shifting to higher

quality oorspace, with a focus upon Cardi city centre. The lack

of shovel-ready employment sites along the M4 corridor is a

constraint on the economy.

David Herbert, Cardi, Cyncoed Property, david.herbert@

cyncoedproperty.co.uk - Things starting to move.

Michael Bruce, Cardi, DLP Surveyors, michael@dlpsurveyors.

co.uk - We have noticed a denite slowdown in the level and type

of commercial enquiries received. There is a general sense of

cautiousness which has not been helped by the decision of TATA

Steel to close the 2 blast furnaces at Port Talbot steelworks - this

has already eected levels of commercial property demand in the

Bridgend/Neath Port Talbot/Swansea area.

West Midlands

David Macmullen, Birmingham, Macmullen Associates Ltd,

[email protected] - Market is plodding

along at a modest level. Activity reects the relative pre-election

mood and may well increase if Labour win the general election.

Malcolm Wilcox, West Midlands, Cordwell Leisure Developments

Limited, malcolm@cordwellgroup.com - The Commercial Leisure

Market depends upon nancial and economic certainty backed

by political stability and the BOE acting to reduce the cost of

borrowing. A signicant upturn is likely when these issues have

been addressed and the General Election decided. This is why the

12 month forecast is the real indicator of market trends.

Michael David Jones, Malvern, Michael D Jones Ltd, Mjones5400@

yahoo.com - Leisure facilities really struggling now , retail market

and in particular secondary /tertiary retail premises oundering

badly.

Mr Simon Horan, Hereford, Faireld Land & Development

Ltd, simon.horan@faireldland.co.uk - Lack of momentum

across multiple sectors due to pending general election. Most

organisations are risk adverse seeking to streamline businesses

to maintain prots as ination still erodes protability.

Neil G Harris, Birmingham, Lane Cove, neil@lanecoveproperties.

com - Finance (cost of) remains a factor holding back the market,

nance availability and cost are a barrier.

UK COMMERCIAL PROPERTY MONITOR

ECONOMICS

rics.org/economics

UK Commercial Property Monitor

RICS UK Commercial Property Monitor is a quarterly guide

to the trends in the commercial property investment

and occupier markets. The report is available from the

RICS website www.rics.org/economics along with other

surveys covering the housing market, residential lettings,

commercial property, construction activity and the

facilities management market.

Methodology

Survey questionnaires were sent out on 13 March 2024

with responses received until 12 April 2024. Respondents

were asked to compare conditions over the latest three

months with the previous three months as well as their

views as to the outlook. A total of 554 company responses

were received.

Responses have been amalgamated across the three

real estate sub-sectors (oces, retail and industrial) at a

country level, to form a net balance reading for the market

as a whole.

Net balance = proportion of respondents reporting a rise

in a variable (e.g. occupier demand) minus those reporting

a fall (if 30% reported a rise and 5% reported a fall, the net

balance will be 25%). Net balance data can range from -100

to +100.

A positive net balance reading indicates an overall increase

while a negative reading indicates an overall decline.

Contact details

This publication has been produced by RICS. For all

economic enquiries, including participation in the monitor

please contact: economics@rics.org

Disclaimer

This document is intended as a means for debate

and discussion and should not be relied on as legal or

professional advice. While every reasonable eort has

been made to ensure the accuracy of the contents, no

warranty is made with regard to that content. Data,

information or any other material may not be accurate and

there may be other more recent material elsewhere. RICS

will have no responsibility for any errors or omissions.

RICS recommends you seek professional, legal or technical

advice where necessary. RICS cannot accept any liability

for any loss or damage suered by any person as a

result of the editorial content, or by any person acting or

refraining to act as a result of the material included.

Economics Team

Simon Rubinsohn

Chief Economist

srubinsohn@rics.org

Tarrant Parsons

Senior Economist

tparsons@rics.org

Dong Lai Luo

Senior Economist

dluo@rics.org

Adib Munim

Economist

amunim@rics.org

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