RICS: Retail property lagging behind office and industrial
The Royal Institute of Chartered Surveyors (RICS) has found that high street properties underperformed compared to other commercial sectors during the second quarter of 2024.
According to the latest Royal Institution of Chartered Surveyors UK Commercial Property Monitor, the commercial viability of the UK’s high streets must be improved, as retail lags behind office and industrial property.
The monitor found that overall confidence in the UK’s commercial property market remained flat during the second quarter of 2024. Meanwhile, the performance gap between prime and secondary property, and between London and the rest of the country, continued to widen.
Tenant demand across all commercial sectors also remained flat (+4% net balance), with industrial property and offices outperforming retail, where respondents are seeing a slight decrease in tenant demand.
However, in a sign of improved positivity, 41% believe that the market is in an early recovery stage, whilst 34% think the market has reached its bottom.
RICS senior public affairs officer, Sam Rees, said: “When it comes to commercial property, there remains a need to increase investment in retail and the high street. The Government have talked about several ways to improve retail conditions including introducing high street banking hubs, the revamping of long-term empty retail units, devolution, and replacing business rates with a new system. These are all good proposals, and if combined with clarity on the use of MEES (Minimum Energy Efficiency Standards) for commercial property, they could help the sector significantly.”
RICS senior economist, Tarrant Parsons, added: “Overall activity remains relatively subdued across the UK commercial property market, with conditions seen as generally flat in Q2. That said, respondents now feel the market is moving towards the early stages of an upturn following a challenging couple of years.”