RICS figures confirm fall in commercial properties market |
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Published
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Wed, 27 Jul 2005 23:40
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The latest figures from the Royal Institution of Chartered Surveyors (RICS) show that the economic slowdown has started to affect the commercial property segment as well.
The commercial properties market especially felt the impact of the prevailing gloomy climate on the economic front in the second quarter of the current year. RICS says that this was due to the cautious outlook that is dominating financial landscape as all sectors of the economy have been on a consistent slide. However, the expansion mindset that has gripped the business services and financial sectors has meant that the office market has shown relatively steady growth and continues to rise. But the retail and industrial property demand has shown no signs of recovery and continues to fall.
The report singles out the prevailing high interest rates as the single most contributory factor responsible for the stalling demand for commercial properties. "Interest rates are expected to fall soon, which may provide some support to the economy later this year," the RICS said in the report.
The manufacturing sector has also fallen prey to the pervading sense of despair in the markets and has not been supported by the wholesale distribution market, which has also been affected in equal measure. This fall in demand has forced landlords to turn to a host of incentives in order to attract tenants. However, even the number of properties coming into the market has fallen, the report added.
Commenting on these not-so-healthy figures, Graham Chase, vice president of RICS said, "Investment appetite for real estate is being fuelled by low interest rates and is drawing more and more from private individuals and institutional investors. But businesses are currently less inclined to take on new space, a clear signal that firms are more hesitant about expansion plans in the current economic climate."
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