The Press and Journal (Inverness, Highlands, and Islands)
Industrial property helped by internet while retail flounders
Online shopping is causing a growing divide between struggling retail and booming industrial property markets in Scotland, a new report has warned.
Announcing its latest quarterly UK commercial market survey findings yesterday, the Royal Institution of Chartered Surveyors (Rics) said there was declining tenant demand and rising availability in
“Challenging environment is unlikely to let up soon”
the retail sector, with weakness in the market spreading to prime locations.
Industrial demand was “still solid” and the office market had seen an improvement, while property investment inquiries had flattened, the report added.
Rics chief economist Simon Rubinsohn said: “It has been hard to escape the grim news from the high street in recent months, with a whole host of well-known names either closing down or looking to scale back their footprint.
“The results from our latest survey of chartered surveyors suggests this challenging environment is unlikely to let up anytime soon.
“Feedback regarding what may be described as secondary retail locations points to further falls in rents over the coming year, with landlords under pressure to increase sweeteners to keep tenants in place.”
He added: “The flip side of this is the positive trend in high- quality, well-located logistic/industrial sites which continue to be sought after by both potential occupiers and investors despite recent price moves.
“Indeed, the likelihood is that the more desirable locations will get even more expensive as the change in our shopping habits continues to advance.”
While Rics said there was little change in occupier demand at the “all property” level during the first quarter of 2018, a sector breakdown for Scotland showed demand for industrial space still rising.
It added: “This contrasts sharply with retail, which saw demand decline further.
“A net balance of 37% of respondents saw a fall in demand for retail property throughout Scotland. Retail landlords in Scotland also raised the value of incentive packages to entice clients for a third consecutive quarter. This in contrast to a decline in the availability of industrial space.”