Surge In Demand For Office Space

23 July 2015, 07:10

Demand from Scottish businesses for commercial property is gathering momentum, according to a new survey.

Industrial and office space led the way in the second quarter of the year, figures contained in a report from the Royal Institution of Chartered Surveyors showed.

Demand for office space grew at the fastest rate since June 2014 and, as a result, 38% of respondents said they expected commercial rents to rise over the next three months.

The report also found that 44% of those asked believed a UK exit from the European Union (EU) would have "significantly negative'' implications for commercial real estate.

RICS Scotland director Sarah Speirs said: "The results of the latest survey suggest the price of commercial real estate will continue to increase over the next twelve months, led by the strength of the retail and office sectors.

"Fortunately, Scotland's occupier market is providing some underlying support for the market and the feedback we are getting from our members in Scotland tells us that the economic expansion is continuing to broaden out with both tenant demand and, just as significantly, investor interest rising in all areas.''

In the investment market, purchase inquiries surged and 73% more surveyors reported an increase in prospective investors over the quarter.

There were also reports of greater overseas buyer interest in Scotland, with 25% more respondents seeing more inquiries from overseas investors.

Andrew Cartmail, of BNP Paribas Real Estate, said: "The economic fundamentals of retention of EU membership are strong and the impending referendum does not appear to have dampened investor appetite.

"As we enter the summer holiday period, there is positive sentiment to get deals concluded, which is a pleasant contrast to the 'wait and see' sentiment of 12 months ago.''