North East retail woes continue, according to new survey
The North East’s retail sector is failing to pick-up in the face of increased online spending but demand for industrial property is holding strong, according to a new survey.
The Royal Institute of Chartered Surveyors’ market survey for the second quarter of the year shows 80% of commercial property agents in the region reported a fall in demand for retail property while 18% saw an increase in occupier demand for industrial space – up from 0 in Q1.
Looking at availability of commercial property, the lack of interest in retail space had a knock-on effect on availability during Q2 - with 76% of commercial property agents reporting an increase in retail outlets ready to be let or bought.
Meanwhile, rising demand for industrial property resulted in 43% more agents reporting a fall in availability of such space during the second quarter of the year, whilst 19% also saw a fall in availability of offices.
Over the next twelve months, further solid growth in capital values is expected across the prime industrial and office sectors, but retail capital value projections remain deeply negative.
Tarrant Parsons, RICS economist, said: “The overall picture remains little changed with the disparity between a strong backdrop for the industrial sector and weakness in retail still very evident.
“While expectations continue to point to solid rental and capital value growth in the former, further declines are expected in the latter.
“Brexit uncertainty also remains a notable headwind, causing caution across both occupiers and investors while they await clarity on the UK’s future trading relationship with the EU.”