Scottish businesses face further rental increases over next 12 months, RICS warns
Scottish businesses are predicted to face further financial pressures with commercial rents expected to rise further over the next 12 months, the Royal Institution of Chartered Surveyors (RICS) warned today.
The RICS UK Commercial Market Survey, Q3 2015, reveals that businesses within the office and industrial sectors in Scotland are likely to experience the most significant rental increases over the next 12 months, at around 4 per cent and 3 per cent respectively.
Demand for commercial properties continues to rise among renters, with a net balance of 20 per cent of respondents reporting an increase in occupier demand over the last quarter. The strongest growth was reported across office space, where 41 per cent of respondents reported a rise.
Sarah Speirs, Director RICS in Scotland, said: “While for individual businesses, the rise in rental values might not be particularly welcome, however, as an outlook for the UK economy as a whole, the survey highlights some very reassuring growth patterns.
“Nationwide, as in Scotland, we are seeing a solid increase in demand for commercial properties across office and industrial sectors. Therefore, at the moment, however badly rental costs might pinch, they do not appear a barrier to growth.”
Availability of leasable commercial space contracted over the last three months, continuing the pattern of declining supply witnessed for the majority of the last two years and placing upward pressure on rents.
Commercial property values are also expected to continue to rise relatively strongly across Scotland over the next twelve months. Office property again is projected to remain the driver with an anticipated increase in value of just over 4 per cent throughout 2016.
Foreign investment in Scottish commercial property, however, has stalled somewhat during Q3, with a net balance of 9 per cent of respondents reporting a drop in enquiries from foreign investors.