Last week’s terrorist attacks on the US will make an economic recovery unlikely and will continue to stifle UK commercial rental growth, according to a report published by the RICS today.
The RICS September economic brief said the manufacturing recession and growing global economic uncertainty has led to a slowdown in rental growth, which is unlikely to pick up over the next few months.
“The global economic outlook was helped by signs of a recovery in US manufacturing, but the shock of the horrific terrorist attack across the Atlantic has dampened hopes of a near-term economic recovery,” the report said.
“Rental growth in the commercial property market continues to slow as economic conditions become more apparent.”
Office rental growth slumped from a high of 11.9% in December to an annualised growth of 4.7% in the three months to July, according to the report.
Retail rents “continue to crawl along at a slow pace” with annualised growth at 1.7% for the three months to July compared with 2.9% in January. Industrial rents were sluggish but solid at 2.8%, compared with 3.3% in April.
Meanwhile, general consumer spending and the housing market “remains firm” with annual growth of house prices estimated at 11.9% in August by Halifax. “The perception of increased wealth bestowed by rising house price inflation has led to homeowners increasingly borrowing against their homes to finance consumer spending,” said the RICS.
EGi News 17/09/01
