Q1 shows mixed outlook for commercial sector, says Propertymark – The Intermediary

Propertymark’s Q1 2024 market outlook report presents a mixed view of the sector’s future.

NAEA Propertymark sales representatives were asked to share their views on the level of supply and demand in the sector over the next 12 months.

50% expected an increase in supply, and 31% predicted a corresponding increase in demand.

When it comes to the office sector, 40% of respondents expect supply to increase, while 80% believe demand will decrease or remain the same.

In the takeaway sector, 27% of members surveyed expected both demand and supply to increase.

However, in the industrial sector, 50% of members expect an increase in demand and 25% expect an increase in supply.

In terms of capital values, sentiment in the land, yards and industrial sectors is positive, but the outlook for the pubs and restaurants sector is rather bleak, with sentiment deteriorating even more than in the last quarter.

This positive sentiment remained in the industrial and land and shipbuilding sectors in terms of rent levels. However, the office and rental sectors remain negative in terms of rent levels.

Finally, 58% of members said rents had increased following the Q1 2024 rent review.

Only 16% said the decline was due to changes in rents.

Nathan Emerson, CEO of Propertymark, said: “Members’ views vary across sectors, but there is significant optimism across the land and yard and industrial sectors.

“Imbalances between supply and demand persist, particularly in the pub and restaurant sector, which continues to be impacted by changing trends.

“However, as the economy stabilizes, we remain optimistic about the prospects for the UK commercial property sector.”

Michael Sears, a member of the trade advisory panel, added: “Appetite for city center retail continues to mainly come from local businesses, but there are some encouraging signs that brands are starting to step up.

“Demand for larger open-plan offices remains low, but there is a resurgence in demand for smaller offices in business centers.

“With the government’s proposals for high street rental auctions set to come to market from September, the devil will be in the detail as to how the mechanics of this might work.

“We need to avoid unintended consequences in the form of falling prices, rents and therefore investment and revitalization of city centers.”