Region’s industrial sector in huge demand as retail falters
The West Midlands’ commercial property sector is being driven by demand for industrial units as interest in retail continues to falter, a report released today says.
The Q1 2019 RICS UK Commercial Property Market Survey says that alongside this, anecdotal evidence suggests a lack of movement on Brexit continues to deter investors and occupiers across the board.
Demand for West Midlands commercial property dropped in Q1 2019, being mainly driven by the lack of interest in retail units. Some 46% more respondents reported a fall in the first quarter of 2019. The rise in online shopping continues to sustain the industrial sector where respondents continued to see a steady rise in tenant demand.
This demand for West Midlands industrial units continues to outpace supply. However, this quarter, respondents reported a rise in the number of available units for sale, resulting in fewer respondents expecting rents to rise in the coming three months.
The latest survey data supports recent reports on the number of empty shops on the region’s high streets, as the number of vacant retail units have been increasing over the past 18 months. Also, with more office complexes completing, respondents reported a slight increase in the availability for the third successive quarter.
As the availability of retail space rises, incentive packages for landlords picked up this quarter, with 48% of respondents reporting a rise rather than a fall in incentives.
Tarrant Parsons, RICS economist, said: “Trends across the UK commercial property market in the early part of 2019 have continued in a similar vein to those reported last year.
“The industrial sector remains a clear area of strength while the retail sector continues to be challenged by the growth in e-commerce. Brexit uncertainty is again cited to be a negative influence on market activity, causing some occupiers and investors to hesitate as they await further clarity on the future direction of policy.”