The latest RICS Commercial Market Survey for Q1 2009 reports that whilst activity in the commercial property market fell further in Q1, 2009, the pace of deterioration in demand moderated across all 3 main sectors of the commercial property market. With demand having fallen at a record pace in Q4, 2008, the Survey observes that the improvement in the market offers some hope that the aggressive cuts in monetary policy have provided some limited support for the commercial market. The Survey also reports that the increase in the amount of available floor space on the market registered another record rise in the first quarter of 2009, led by the central London office market. As a result landlords are increasingly having to offer larger incentive packages in order to secure a letting, with the sharpest increase in incentives in the office market. As a result of the increases in supply of floor space on the market, rental expectations are heading downwards.

RICS survey contributor, Andrew Kilpatrick of Thompsons said that whilst conditions in the commercial property market are expected to remain challenging for the rest of the year, the rapid reduction in demand has now fallen away and a degree of stability has returned to the market, with pockets of interest popping up in all sectors, both in Swindon and elsewhere. Whilst it may be premature to talk of green shoots, there are also signs of greater activity in the investment market as the recent rise in yields is beginning to make property investments look more attractive, particularly when returns on savings from Banks and Building Societies are so low.

Thompsons are chartered surveyors and commercial property specialists and Andrew Kilpatrick BSc FRICS ACIArb IRRV of Thompsons may be contacted at Istabraq House, 42-44 Commercial Road, Swindon, SN1 5NX. Tel: 01793 643101. Email: post@thompsons-cpc.co.uk. Thompsons are a part of the AICPC, a unique regional network of commercial property of independent commercial property surveyors covering the M4/M40/M5 corridors.

Copies of the RICS Commercial Market Survey may be obtained from the RICS on 020 7222 7000.

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