February 4, 2004—Demand for business premises rose over the final quarter of 2003, good news for property markets after eleven successive quarters of decline.
These figures will fuel speculation that a property recovery is underway in the UK, says the Royal Institution of Chartered Surveyors.
Although the rise was slight, there is a definite upward curve, RICS adds. New occupier iinquiries were up, and surveyors expect rents in the first quarter of 2004 to increase for the first time in two and a half years.
The value of inducements offered to persuade tenants to sign leases also continued to rise in the fourth quarter, but at a slower pace. Business occupiers can still get favorable terms, RICS notes, but the tide may be on the turn here.
In London, 35% more chartered surveyors reported a rise in demand for office space than the previous quarter. But rental outlook is still negative as the current oversupply of office property is acting as a brake on rent rises. This slack will only be taken up by a sustained strengthening of the wider economy, RICS says.
These results are consistent with an earlier study by the Urban Land Institute and PricewaterhouseCoopers, which concluded that investors were generally optimistic about property prospects in Europe
—Elliott Chase
Reprinted with permission; copyright 2004 i-FM
