UK Commercial Property Update Q1 2019

Headline rent expectations suggest UK rental values will stabilise in the near term

Outlook for industrials is still solid however

Rental values are expected to remain broadly steady for offices

Whilst rents across the retail sector are expected to continue falling

Supply of vacant retail space has continued to edge upwards

Whilst landlord incentives offered to tenants have risen sharply in this area

Retail rents are projected to decline in both prime and secondary locations

With rents envisaged to fall across all UK regions

The RICS investment enquiries series points to a softer trend in UK capital values

But this is mostly driven by downbeat sentiment across the retail sector

Outlook for industrials remains solid

Expectations for capital values are broadly similar for London and nationally

Overseas interest appears to be holding up despite Brexit uncertainty

A growing share of respondents see the market as in the downturn phase of the cycle

Meanwhile credit conditions appear to have deteriorated slightly (in net balance terms)