Demand for commercial property in the North East rose during the last quarter of 2016, says the Royal Institution of Chartered Surveyors.
The RICS UK Commercial Market Survey 2016 foiund the number of enquiries from potential investors picked-up pace as the year drew to a close.
The results highlight the resilience of the economy in the wake of the vote to leave the EU but also clearly demonstrate the demand for large warehouses to support the development of the distribution industry as consumers are increasingly going online to make their purchases.
Despite some concern surrounding the possibility companies might leave the region after the Brexit vote, commercial chartered surveyors reported an increase in demand for all commercial property types during Q4.
Industrial property proved the most sought after, with 32% of respondents seeing a rise in demand for such space (up from 13% in Q3), whilst 21% of respondents saw a rise in enquiries for offices (up from 5% in Q3) and 16% reported an increase in demand for retail space (up from 4% in Q3).
Simon Rubinsohn, RICS Chief Economist, said: “The results for the Q4 survey suggest that the commercial property market is continuing to attract investor interest despite ongoing concerns about pricing and the prospects for the economy more generally.
“The results highlight the resilience of the economy in the wake of the vote to leave the EU but also clearly demonstrate the demand for large warehouses to support the development of the distribution industry as consumers are increasingly going online to make their purchases.”
On the supply side, the availability of commercial property fell across all sectors except for retail, where 9% of respondents reported a rise in available leasable space. Respondents also reported a lack of development starts in the region across all commercial property sectors.
The combination of increased demand and limited supply suggests rents for all commercial property types will rise over the coming year. More respondents expect rents to increase, with 59% expecting industrial rents to rise and 50% predicting the same for office space.