Increased occupier demand for offices went hand in hand with a sharp decline in the fortunes of the retail sector in the first quarter of 2005, according to the RICS’s latest market survey.
The office sector saw continued steady increases in demand with a net 17% of surveyors reporting a hike, up on 13% last quarter.
The London market saw the strongest activity, with a net 44% of surveyors reporting a rise.
Other market indicators were also positive.
Vacant offices and the value of incentives offered to tenants both fell at their fastest rates for over four years, while lease lengths showed tentative signs of bottoming out, with the smallest decline reported since the second quarter of 2001.
But there was gloomier news from the retail market.
The sector saw the largest fall in take-up for two years, bucking the gentle upward trend seen over the last 18 months.
RICS attributed the fall principally to “faltering retail sales”.
Demand for industrial space rose modestly, driven by strong activity in the distribution sector. Enquiries rose at their largest level for more than four years.
The RICS reported 13% more surveyors across all sectors forecasting rents to rise rather than fall, up from 9% in the previous quarter.
References: EGi News 28/04/05
