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...but London and Scotland still lags behind due to continued political uncertainty, according to the latest RICS survey.

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  • What’s the latest?

    Interest in renting commercial property edged up during the summer, driven largely by a demand for industrial warehouses.

    According to the latest RICS survey covering July to September, 27% more commercial property agents reported a rise in demand for industrial property across the UK.

    In fact, interest in all commercial space grew across most regions of the UK, with two exceptions.

    Scotland has seen the sharpest fall in rental demand for commercial property, with 24% more agents seeing a drop.

    And in London, interest in renting commercial property slumped for the second quarter running. Demand for office space weakened the most of all the commercial property types.

    Why is this happening?

    There was a notable rise in caution in the weeks and months leading up to the EU referendum vote on 23 June. However, this mood seems to be waning.

    RICS chief economist, Simon Rubinsohn, said: “The commercial market has subsequently settled down, which is broadly consistent with much of the other macro news flow that has emerged over the past few months.

    In particular, the rebound in our occupier demand indicator suggests that for at least the time being, the UK economy is proving relatively resilient.

    However, political uncertainty is continuing to have a knock-on effect in particular on Scotland and London’s commercial property markets.

    Stockley Park in Uxbridge.

    Above: office to rent at Stockley Park, Uxbridge.

    Sounds interesting. What’s the background?

    Interest in buying commercial property also climbed during the summer months, with 9% more agents noting an uptick in investor enquiries.

    Overseas buyer appetite improved, particularly in London, as they looked to capitalise on the devaluation of the sterling.

    All the indicators paint a more positive picture. Some 24% more agents expect commercial property prices to climb over the next 12 months, with 'good quality industrial warehouses and offices' leading the charge.

    Top takeaways

    • Nationwide interest in renting commercial property edged up during the summer, driven by demand for industrial warehouses...
    • ...but London and Scotland still lag behind in the recovery.
    • The devaluation of the sterling has tempted overseas buyers back to the market.

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