by jbs110909 h3 — November 11, 2009—A majority of surveyors in the U.K. are now reporting rising inquiries and lettings activity for the first time in more than two years, with London leading the commercial property recovery, according to the latest Commercial Property Survey from RICS (Royal Institution of Chartered Surveyors).
The London commercial property market is leading the turnaround in tenant activity with retail and office demand moving into expansionary territory at a faster pace than elsewhere. Central and Greater London office markets saw tenant demand rise for the second consecutive quarter and at more than double the pace of the previous survey period.
Forty-two percent more chartered surveyors reported a rise than a fall in lettings activity in Central London, compared to 18 percent in the previous quarter, the highest figure since the first quarter of 2007. Across the U.K. as a whole, the net balance for tenant demand has risen to 8 percent from a negative reading of 11 percent in the previous quarter.
Despite the improvements in demand, rental expectations have yet to turn positive, although the latest survey points to a sharp deceleration in the likely pace of rental declines across all three sectors in the run up to Christmas.
The greatest turnaround in sentiment has been among surveyors working in the Central London office market, where only modest declines in rents are expected into the fourth quarter. For the time being, greater lettings activity continues to be supported by rising levels of inducements that rose at a similarly firm pace across all three sectors in the third quarter.
Looking ahead, near term indicators continue to point to an ongoing improvement in the fourth quarter, notes RICS. New enquiries to occupy business space turned positive for the first time since the downturn got underway and it is the first time in five years that inquires have risen in unison across all three sectors. The net balance currently stands at 11 percent, up from a negative 2 percent in the second quarter.
