Lease Advisory Market Update
Friday 16 December 2022
Flude Property Consultants are delighted to share with you our most recent lease advisory update. Acting on behalf of both landlord and tenant clients, our dedicated professional services team have concluded a number of rent reviews, lease renewals and re-gears.
Nationally, we have seen a weakening in market activity, with increasing pressures from the cost of living crisis, strikes across several sectors, inflation and the prospects of further interest rate rises.
Agents expectations reported in the RICS UK Commercial Property Monitor Q3 2022 are for rents and capital values to fall. However, our agents’ experience on the South Coast is generally positive in terms of demand. Where properties being marketed are sensibly priced, we are receiving fair levels of enquires and landlords are not having to concede the level of incentives to attract tenants as many other locations across the nation.
The industrial and warehouse sector has boomed for the past 3 years. Fuelled, in the main, by the rapid growth of online retail – the growth of which was exacerbated during the Pandemic. Combined with the limited amount of new development, availability in the south has been at an all-time low whilst rents have reached unprecedented levels. However, the 2nd half of 2022 has seen a reduction in demand and growing evidence that rents have plateaued.
Retail and leisure premises, having seen their rents rebased to more affordable levels over the past 3 years, are still generally managing to attract occupiers.
Office space continues to be lost to alternative uses - particularly where the buildings are dated and / or locations with limited office occupier demand and where residential conversion and redevelopment show stronger capital values. However, there remains a surplus of mediocre quality space in the market, which is tending to stick and for which we have seen rents softening. The best located and specified offices have managed to maintain and in some cases improve upon the rents being achieved pre-Covid.
Click on the link below to view our market update flyer.
