UK Commercial Property Update Q3 2018

Headline rent expectations are consistent with a flat outlook for rental values

That said the headline series is heavily weighed down by the retail sector

Demand for retail space has declined significantly

Industrial rents are expected to continue rising firmly

The outlook for offices is modest in comparison

The retail sector remains under pressure across all regions

And the picture is not expected to materially change in the medium term

Flat investor demand suggests capital value growth will moderate

But this is exacerbated by falling interest in the retail sector

Where landlords are expected to cut their exposure

Unsurprising given the possibility of more retailers looking to insert CVA clauses

Contributors remain upbeat regarding the industrial sector

And office investment enquiries point to a stable trend in capital values

The picture for London offices is broadly similar

Sentiment across the capital is a little more downbeat across market segments

With many viewing the London market as expensive

And currently in the downturn phase of the cycle

The share of respondents noting some relocation of business has risen over the quarter

With the largest proportion in Northern Ireland and London