Tenant demand dropping in the West Midlands

TENANT demand in the West Midlands fell last quarter with a considerable decline in the office sector, says the RICS’ UK Commercial Property Survey.

Demand fell in the region’s commercial property sector with 2% more chartered surveyors reporting a rise rather than a fall in tenant demand in the second quarter in 2010, down from a more positive 11 percent previously.

Surveyors have reported that uncertainty over cuts in the budget have weighed on investment decisions while demand in the retail and industrial markets also fell across most regions, according to the research from the Royal Institution of Chartered Surveyors.

The West Midlands reported a fall in new enquiries overall, with the net balance falling to a negative 13% from a positive 9% in the previous quarter.

Confidence in the outlook for lettings has also fallen for first time since Q2 2009, with the overall balance being a negative 7% – both nationally and in the West Midlands.

Mark Swallow, of RICS West Midlands, said: “Surveyors have indicated that uncertainty as to the detail of budget cuts are weighing on firms’ investment decisions with respect to their property requirements.

“As a result, the rental recovery is stalling in its tracks on waning demand.

“Falling stock markets, worries over both the Euro zone debt crisis and the sustainability of the recovery, appear to be weighing on occupational demand from large multinational occupiers.”