Demand for commercial space in the West Midlands surges ahead

RICS UK Commercial Market Survey says demand for

Article posted: 14 May 2011

Demand for commercial property in the West Midlands rose strongly during the first three months of 2011, according to the latest RICS UK Commercial Market Survey.

13% more surveyors in the West Midlands reported increases rather than falls in demand for commercial property, up dramatically from the previous three months.

Office space in the West Midlands showed the greatest increases in available commercial space.

As a result, expectations for rents in the West Midlands continued their slide for the 14th consecutive quarter, with 17% more surveyors expecting rents to fall rather than rise. Elsewhere, only office space in London bucked this trend, with rental expectations increasing at the fastest pace since Q3 2007 in the capital.

Respondents to the survey noted that rent levels had been affected by changes in empty property business rates. This is a particular problem where there are high levels of empty commercial space, such as in the Midlands and Wales.

Looking to the short/medium term, the lack of development pipeline for office space in Birmingham – as well as all major regional cities – will undoubtedly lead to upward pressure on prime Grade A rental values.

Commenting on the findings, Ashley Hudson, Head of the Birmingham office at Knight Frank and RICS spokesperson said: “in the investment market, though secondary stock continues to struggle, there is significant demand for prime, core stock with most UK institutions having requirements for well-let product. In addition, UK and overseas private buyers are actively competing for assets providing a strong income stream.”

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Posted by Sara