A GROWING number of retail landlords in Yorkshire resorted to offering incentives in order to let their premises last quarter, says a report.
With occupier demand having fallen for the past 12 months, the number of landlords offering inducement packages – such as rent-free periods or financial incentives – on retail premises continued to increase, said the latest RICS UK Commercial Market Survey.
Last quarter, a net balance of 29% more respondents reported rises.
The survey showed that with interest in retail floor space falling, Yorkshire surveyors’ expectations for future rents were downbeat – as a net balance of 35% more respondents in the region predicted values to continue to fall over the coming three months.
Overall demand for commercial property in the region remained relatively subdued, with 9%t more surveyors seeing a fall rather than a rise in interest from potential occupiers.
The survey said uncertainty over the economic prospects for the UK in the light of the continuing turmoil in the euro area was clearly affecting the appetite of businesses to take on more space.
As a result, expectations for rents continued their slide for the 19th consecutive quarter.
But Graeme Haigh, of Bramleys in Huddersfield, said: “Owner occupier demand particularly for industrial property below 5000sq ft remains comparatively good and suburban retail is also holding up well but offices remain an uphill struggle.”
Simon Rubinsohn, RICS chief economist, said: “It seems that ongoing economic uncertainty is continuing to take its toll on the retail sector in particular and landlords across much of the country are having to encourage would-be occupiers in any way that they can.
“Moreover, with demand set to remain relatively downbeat, it is unlikely that the rental picture will see any significant improvement in the near term.
“London still appears to be where the most activity is taking place. Prime office space continues to be sought after and rental expectations are still rising.
“Unfortunately, the more positive story in the capital will only begin to ripple out if the economic news flow begins to improve which, at this stage, appears some way off.”
