Thursday 01st October 2020
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Region’s office market turns down but demand for industrial space holds up

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The commercial property market in the East of England is in “some stage of a downturn” and most surveyors in the region in the region expect retail and office rents in the region to fall as firms use less space and more people work from home over the next two years, according to the second quarter RICS commercial property survey.

However demand for industrial space rose in the region in the period and there is growing interest nationally in ‘secondary units’ such as shops, partly for their potential for conversion to housing. Nearly half of those surveyed saw occupier demand fall in the second quarter with the retail sector in the East seeing the largest fall since 2008 whilst demand for office space fell ‘dramatically’. But a net balance of +18 per cent of surveyors reported a rise in interest for industrial space. Over the coming year, the survey suggests prime office rents are set to fall by -3.7 per cent and for secondary space by -6.2 per cent but nearly a fifth of respondents expect industrial rents to rise in the East.

RICS economist Tarrant Parsons said: “…the recent shift into remote-working raises many questions across the office sector, with respondents expecting businesses to re-evaluate their office space requirements over the next two years. On a brighter note, the outlook is already showing signs of recovery across industrial sector, which remains set to benefit longer-term from an acceleration in the growth of ecommerce.”