Rental growth has hit a nine-year high, but will slow down, warns GVA Grimley in its latest Economic and Property Market Review.
Despite a fall in business confidence and the slowing of economic growth, rental growth should peak this year but GVA Grimley reckons it will slow down with growth rates at a 1% low in 2001.
“We are currently at the peak of the property cycle with rental growth increases high and investment returns still edging up, but a slow down in growth is inevitable as a result of less demand for occupation and a weakening economy,” said Malcolm Gloster, GVA Grimley’s regional senior partner in Birmingham.
He added: “Over the past 15 years the peaks and troughs of the property market have provided obvious cycles. However, the market is now less dramatic and we do not forecast a clear recession, just a slowing down of property demand and rental growth in the next three years.”
There are mixed fortunes in property with differences in regional and market sector performance, explains the report. “Demand for space in the Midlands is still relatively high, due to the lack of options available in the market. In central Birmingham, for example, demand for offices is relatively healthy with take-up at similar levels to 1997,” Gloster said.
- Telephone 0870-900-8990 for a copy of GVA Grimley’s Economic and Property Market Review.
EGi News 17/09/98
