Property demand down but North East optimistic

Cobalt Business Park in North Tyneside Surveyors in the North East are more confident about office rentals

The balance of surveyors reporting demand for commercial property in the third quarter of 2008 has fallen at the fastest pace in a decade. That's the news from the Royal Institute of Chartered Surveyors this week - but they also said the mood in the North East was starting to improve.

According to RICS' Commercial Property Survey, 52% more Chartered Surveyors reported a fall than a rise in demand compared to 50% in the last quarter. The worst hit area continues to be the retail sector with 59% more Chartered Surveyors reporting a fall than a rise in retail demand.

However Chartered Surveyors in the North East reported that demand and confidence in the retail sector had both improved since the start of the summer.

33% more Chartered Surveyors in the North East reported a fall than a rise in office demand, however confidence is up on rental expectations compared to last quarter. In the industrial sector demand and confidence in the region improved, with rental expectations and numbers of occupier enquiries declining since the second quarter of 2008.

The North East region continues to fair reasonably well in comparison to other UK regions with demand falling at a slower pace. Confidence in the outlook across the office, retail and industrial sectors is however much improved on last quarter with surveyors optimistic about what the future holds.

Kevan Carrick, Policy Spokesman for RICS North East, said: "The figures in today's report were only to be expected given the present economic climate. It is promising to see that there is still a measure of demand for industrial and retail space in the region and that confidence is much improved across all sectors. It would be absurd to embark on any new developments given the financial downturn and the region has taken sensible and pragmatic approach.

"As a region we must not panic or be nervous about what the future holds, but instead use this time and our confidence in the region, to prepare for better times ahead. We must ensure we're as productive as possible, stay ahead of the competition and work on our own assets."

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