Demand for shops stays flat
DEMAND for retail premises in the North West failed to keep pace with availability in the first three months of 2012, according to the Royal Institution of Chartered Surveyors (RICS).
The organisation’s latest UK Commercial Market Survey states that a net balance of 5% of respondents reported reduced demand for retail space, which contrasted with a net balance of 24% recording an increase in in floorspace.
As a result, rental expectations for the region’s retail sector were firmly negative with 20% more surveyors predicting falls rather than rises in rental values over the next three months. Significantly, every other UK region also reported negative readings for rental predictions.
Overall, there was little change in activity levels across the whole of the North West’s commercial property sector, although demand for floorspace edged up in the early part of the year after falling during the latter part of 2011.
New development starts were in negative territory during the early part of the year (net balance -3%), which has been the case in every single quarter since the onset of the credit crunch in mid-2007. Notably, surveyors in all regions of the country reported falling development levels.
Overall rental expectations also remained downbeat as 9% more surveyors predict rents more likely to fall rather than rise over the next three months.
RICS North West spokesman, Jonathan Mills of Jones Lang La Salle, said: “The retail property sector continued to suffer in the early part of the year with falling demand resulting in the continuing negative outlook for future rental values and activity.
“Across many parts of the country, it seems that the commercial property sector in general is continuing to struggle, with a lack of affordable finance proving a big barrier to growth.”
