RICS says demand for commercial property in Yorkshire and the Humber region is increasing as potential investors pick up the pace.
According to the Royal Institution of Chartered Surveyors (Rics) UK Commercial Market Survey for the final quarter of last year, investment enquiries rose across all sectors in the period, with the industrial sector continuing to outperform office and retail.
Expectations for rental and capital value growth have also increased, said Rics.
Despite some concern surrounding potential relocation of companies based in the region, after the EU vote, commercial chartered surveyors in Yorkshire and the Humber reported an increase in demand for all commercial property types during Q4.
Simon Rubinsohn, chief economist at Rics, said: “The results for the Q4 survey suggest the commercial property market is continuing to attract investor interest, despite ongoing concerns about pricing and the prospects for the economy more generally.
“The results highlight the resilience of the economy in the wake of the vote to leave the EU but also clearly demonstrate the demand for large warehouses to support the development of the distribution industry as consumers are increasingly going online to make purchases.”
Industrial property proved the most sought after, with 32 per cent of respondents seeing a rise in demand for such space (up from 13 per cent in Q3), while 21 per cent of respondents saw a rise in enquiries for offices (up from 5 per cent in Q3) and 16 per cent reported an increase in demand for retail space (up from 4 per cent in Q3).
On the supply side, availability of commercial property fell across all sectors except for retail, where 9 per cent of commercial chartered surveyors in the region reported a rise in available leasable space (up from 5 per cent in Q3).
Respondents also reported a lack of development starts in the region across all commercial property sectors.
Consequently, this rising demand, compounded with a lack of available commercial property, has led to commercial chartered surveyors in the region anticipating that rents for all commercial property types will rise over the coming 12 months.
More respondents expect rents for prime industrial space and prime offices to increase, with 59 per cent expecting industrial rents to rise and 50 per cent anticipating rents for offices will increase.
Only 16 per cent of respondents expect rents for prime retail space in the region to increase over the coming year – this is most likely due to the competitive nature of the retail sector and the need to attract and maintain good tenants.
Near-term capital value expectations remained positive across all commercial property sectors in Q4, with 21 per cent more respondents in Yorkshire and the Humber projecting values to rise (rather than fall) over the coming quarter.
Over the next 12 months, 38 per cent of respondents anticipate capital values will increase across the majority of commercial property sectors, led by the prime industrial market and prime office sector.