Q4 2011 RICS UK Commercial Market Survey

Sentiment in the commercial market eases further

• Weaker demand and rising availability leads to most negative rent expectations net balance since Q3 2009 Occupier demand and available space, England and Wales % Balance, seasonally adjusted

• Development starts fall further across all sectors of the market 80

60 • Capital value expectations fall further and surveyors

expect investment transactions to slow significantly 40

The latest RICS UK Commercial Market Survey continues to 20 show falling occupier demand and rising availability, which is 0 leading to an increasingly negative rental outlook. Furthermore, surveyors expect the market to stagnate as finance remains tight -20 and tenants become increasingly cautious. In particular, Demand -40 respondents are continuing to express concern regarding Availability economic prospects at home and abroad. -60

The mood among surveyors deteriorated across all sectors of -80 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 the commercial market in the final three months of the year, with retail and offices suffering the most. The net balances for both tenant demand and expected rents fell further into negative Rental expectations (1 quarter ahead) - UK and London territory, while available space continues to rise. Demand for % Balance, non seasonally adjusted industrial space was unchanged as was the supply of space, though rents are still expected to fall in Q1 2012. 100

The supply pipeline for commercial stock looks weaker, as new 80 development starts eased further for all sectors, most notably for 60 UK retail units. On the investment side, enquiries for office space fell London 40 for the first time in a year and expectations for future transactions also declined. Capital value expectations fell at a 20 faster rate for all sectors. 0

Significantly, London and the South no longer seem immune to -20 the negativity felt elsewhere in the UK. Indeed, the Central -40

London office market, which had remained buoyant over the first -60 half of the year, saw occupier demand fall for the first time in 18 -80 months. Alongside this, available space is now rising for the first time since Q3 2009, though rental expectations remain broadly -100 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 stable.

All commercial property : England and Wales Change during the quarter Expected next quarter Available Occupier Capital Rental space for demand values levels % balance* occupiers for space Q4 5 1 -9 -7 2011 Q1 7 9 -8 -11 Q2 11 11 -3 -5 Q3 16 -12 -13 -17 Q4 16 -13 -29 -29 * Net balance = Proportion of surveyors reporting a rise in prices minus those reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted net balance will be 25%)

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RICS UK Commercial Market Survey Q4 2011 Commercial property - all sectors

Demand Occupier demand declined for the second Change in sales & lettings of commercial space to occupiers over consecutive quarter at the headline level, though the the past quarter pace of decline was largely unchanged; the net % Balance, seasonally adjusted balance shifted from -12 to -13. Demand was particularly weak for office and retail space, while it 40

remained broadly unchanged for industrial units. 20

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-100 19981999200020012002200320042005200620072008200920102011

Floor space availability Available space continued to rise in Q4, though the Change in available commercial space for occupation over net balance was unmoved at +16. Availability for the past quarter retail and office space rose at the fastest pace, % Balance, seasonally adjusted

while it stabilised for industrial units. 80

60

40

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-40 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Expected rents Rental expectations have plummeted this quarter, Surveyor expectations for the change in rents for the next with the net balance sinking to the most lowest quarter reading since Q3 2009. Sentiment is most negative % Balance, seasonally adjusted for office and retail rents, but rents are also expected to decline in the industrial sector. 40

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2 RICS UK Commercial Market Survey Q4 2011

Capital value expectations Capital values are expected to continue falling into Capital values of commercial real estate over the previous three 2012, marking nearly 2 years of declines; the net month period balance fell further to -28. The greatest falls are % Balance, non seasonally adjusted anticipated for office and retail space.

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-20

-40

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-80

-100 2008 2009 2010 2011

Investment enquiries Investment enquiries edged down in Q4, with the Change in investment enquiries for commercial real estate over the net balance falling from -2 to -18. The retail sector past quarter saw the greatest declines, though enquiries fell for % Balance, non seasonally adjusted all sectors. 60

40

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-100 2006 2007 2008 2009 2010 2011

Inducements The value of incentive packages offered by landlords to secure a letting increased further in Q4, Change Inducements over the past quarter with the net balance ticking up to +25. Inducements % Balance, seasonally adjusted are rising across all sectors of the market, but once

again, most significantly for retail space. 100

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-80 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

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3 RICS UK Commercial Market Survey Q4 2011 Chartered surveyor market comments EAST MIDLANDS Tim Richardson BSc MRICS, Innes Simon Beeton MRICS, Derrick Wade Phillipa Jeal MRICS, Phillipa Jeal England, Derby, 1332362244 - There Waters, Harlow, 01279 629225 - Retail Property Consultants London, is still underlying activity in the Lack of good quality industrial stock 020-7584-6861 - For central south

industrial and office sectors with above c 10,000 sq.ft. is reining in west London market, Knighthsbridge, Andrew Nichols MRICS, Gadsby transactions occurring on sensibly incentives. Office enquiries are Chelsea and Central London, Orridge, Derbyshire, 1332290390 - prices freeholds. The leasehold increasing but demand is focused on demand still outstrips supply for retail Market very quiet, increasing supply market is very patchy. best buildings in locality potentially & investments. Very few new of secondary office and retail space releasing poor quality stock into the developments. Few distressed sales with little occupational demand. J A Smith, FRICS, R Longstaff & Co, market for which there is little as in these areas it can be possible Industrial market holding it's own - Spalding, 01775 766766 - The demand. to sell on the lease/freehold before just. market remains challenging and the point of distress etc.

there are, therefore, few transactions Craig Knights BSc (Hons) MRICS, Ian Leather, Lambert Smith taking place. Arnolds Chartered Surveyors, Roland Williams MRICS, Tuckerman Hampton, Northampton, 01604 Norwich, 01603 216825 - The Commercial Ltd., London, 0207 222 664366 - The regional markets have secondary office market remains the 5511 - Our overall perception with a lack of Grade A space and an EASTERN most problematic sector, closely office lettings in Victoria is that increasing supply of Grade B stock, followed by retail. We have seen a lot demand has remained fairly constant some of which does not meet of activity in Lowestoft and Great throughout the year, neither occupier aspirations. The Central Jonathan Lloyd MRICS, Hazells Yarmouth Enterprise Zones and we increasing or decreasing much. London development stock is out Chartered Surveyors, Bury St are of the opinion that we will see a However there is now a shortage of performing the rest of the UK which Edmunds, 01284 702626 - In Bury St good level of activity in these quality stock which is forcing tenants is going to create ongoing supply Edmunds, we have noticed that locations in 2012. to make quicker decisions and problems. This will provide an existing office stock is slowly but accept reduced incentives. opportunity for the landlord/investor surely being taken up and there is Philip Woolner MA MRICS, Cheffins, with good quality Grade B space to little quality coming onto the market Cambridge, 01223 213666 - Demand Kevin Kemplen MRICS, Kinney attract occupier interest, plus an to replace it. This will leave new across the board is at very low levels, Green, London, 0207 495 1222 - opportunity to recycle dated buildings requirements, particularly over 5,000 reflecting a lack of business Difficult to draw any concrete much quicker than the development sq ft, struggling to find suitable confidence. Low levels of supply of conclusions from the past three pipeline. quality accommodation. This should prime office and industrial stock months as the market would appear have the effect of pushing up rental across the Cambridge region are to be in a state of limbo with the Mike Hammans MRICS, Hammans values in the near future. holding values up. majority of tenants only taking Property Consulltants Nottingham, decisions where absolutely Nottingham, 0115 9390613 - Market Sam Kingston MRICS, Roche Stuart King BSc MRICS, Davies King necessary. conditions extremely hard, but there Surveyors, Norwich, 01603 619876 - Chartered Surveyors, Letchworth are foreign investors who will The Norwich market remains in a Garden City, 01462 484272 - It has Charles McClean MRICS, CJ purchase good quality investments if difficult position. There is an over become a very hard market which McClean Associates Ltd, London, the price is discounted supply of office stock, generally, but can vary between close geographical 020 7758 0415 - Tenant sentiment with limited Grade A opportunities. areas. when relocating is very cautious and Ben Coleman BSc FRICS, Ben The industrial market has faired few are willing to commit to a lease Coleman Associates, Northampton, better with supply more limited and Andrew Bastin FRICS, Bastin beyond 3 years and most are looking 01604 660014 - The market still a reasonable number of Steward, Norwich, 01603 665 996 - to save money when relocating, even continues to move sideways, enquires. The towns in Norfolk has European financial uncertainty if it means having to move to a shortage of investment stock suffered less as supply and demand continues to dog occupier and cheaper area. continues to frustrate. is more closely aligned. investor decision making despite a

supposed improvement in bank Simon Kibble AssocRICS, Frost Stephen Smith BSc. FRICS, Blacklee Mike Sumpster FRICS, Barker Storey lending for the property sector. Meadowcroft, London - Kensington & Smith LLP, Northampton, 01604 Matthews, Cambridge, 01223 Chelsea, 020 7938 2341 - There is a 635400 - There has been a slight 467155 - There has been a steady concern that the economic turmoil increase in the number of enquiries but low level of occupier and CENTRAL LONDON will have a negative effect on office for good secondary industrial/ investment enquiries over the last demand and values in 2012 even warehousing space but otherwise the three months. The political/economic though the end of 2011 has seen market remains flat. news has slowed markets but it is Kim White MRICS, Kinney Green, little effect of this. hoped that the early part of 2012 will City of London, 0202 643 1500 - Low

Andrew Woods FRICS, Harwoods, see some improvement as the supply and weak demand except at Wellingborough, 01933 441464 - existing stock of quality the lower end, up to 10,000 sq ft. GREATER LONDON Market conditions are difficult. accommodation is taken up. Confidence is not high. Press and TV Cambridge has seen a number of Christopher Pryke, George Trevor are negative. Office sector suffering office and R&D deals completed and Associates, London, 020 Tunde Adegbemile MRICS, DTZ, but 2 freehold sales of older style mainly based on the science based 74992516 - The West End office London, 0203 296 3000 - With offices have just completed for owner industry. market is holding up well in the face decreasing levels of availability of occupation. of a fall in confidence throughout the Grade A space in the Greater Tony Barker BSc FRICS, Barker UK economy. London industrial market, the William Bradley, Lambert Smith Storey Matthews, Peterborough, pendulum appears to be swinging Hampton, Nottingham, 1159501414 - 01733 897722 - The lack of good Neil Prince MRICS, Matthews & slightly back in favour of the landlord. The office market is still relatively quality modern office accommodation Goodman, London West End, 020 slow. There is a lack of enquiries and was highlighted by the pre-let of 7747 3170 - The West End office Tom Dymond MRICS, SGP Property majority of those rarely come to 31000 sq ft at Cygent Park, Hampton market remains finely balanced with & FM, London, 0207 788 8989 - We fruition. The industrial market is to Kelway in the Autumn. With the low supply, but also restrained deal with Retail Leashold disposals & livelier ie- more demand. But still lack of new development there is demand. The development pipeline Acquisitions across the UK. remains a challenge to put a deal now a shortage of freehold office remains low with only well funded Generally the market remains very together bearing in mind the level of space in the size range 3000 sq ft to developers able to commence tough, with demand certainly not rent free tenants demand. 5000 sq ft. projects. increasing over the past 3 months & the supply of prime & secondary units on the rise.

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4 RICS UK Commercial Market Survey Q4 2011

NORTH WEST SCOTLAND Justin Clack RICS, Frost Andrew Archibald MRICS, Keygrove Meadowcroft, London (Hammersmith Chartered Surveyors, Southampton,

& Fulham and Chiswick, 020 8748 023 8063 5333 - There has been Antony Hill FRICS, Antony Hill Alan Gilkinson, Ryden, Glasgow, 1200 - Demand and office lettings less activity in all market sectors Partnership, Southport, 01704 0141 270 3138 - Generally and sales have held up in since early October. 532728 - There is interest in small businesses are trading well and Hammersmith and Fulham and shops and serviced offices but the many report encouraging figures. Chiswick in the last quarter despite Jeremy Braybrooke MRICS, landlords and are anxious to avoid However, there is a lack of the economic gloom widely reported. Osmond Brookes, Southampton, 023 “empty rates”. Bank funding very confidence about the future and it We expect there to be more 8000 2020 - Retailers and investors tight. No large deals around. Need to appears easier to defer a decision, if uncertainty in Q1 2012 and therefore alike are becoming more choosy in keep at it to the market going. this is an option, rather than to make less office and investment their expectations and requirements a decision and take a risk. transactions than in the last quarter and know they don't have to ever Matthew Illingworth MRICS, Consequently, from an occupational of 2011 as companies remain hurry. Difficult times ahead for the Cushman & Wakefield, Manchester, prospective, there is plenty of cautious rather than expanding as High Street. 0161 828 5309 - The last quarter of window shopping but few significant the Euro Crisis continues. There will 2011 has become tougher and transactions. There are a good continue to be some transactions as Colin Davies FRICS, Graves Son & occupiers are getting nervous and number of requirements for larger companies take advantage of lease Pilcher LLP, Brighton, 01273-321123 putting off decisions. Investors are properties and it appears there will events to relocate. - Uncertainty in the financial markets also appearing to be nervous of be greater activity in Q1 2012. is continuing to have an effect. 2012 and uncertainty is reducing Joshua Pater, Colliers CRE, levels of interest and values. Allan Lapsley BSc FRICS MCIArb, Heathrow , 01895 813 344 - Demand Scott Tyler MRICS, Allsop LLP, Speirs Gumley, Glasgow, 0141 332 and rents still solid in core markets London, 0207 437 6977 - The last 4 Stephen Sewell MRICS, Walton 9225 - Modern well maintained multi- inside M25. Softening seen in weeks has seen greater uncertainty Goodland, Carlisle, 01228 514199 - let industrial and/or trade park secondary and where supply lag still from all investors in light of Euro Run up to Christmas trading period estates remain popular with funds exists. crisis. The UK funds still have money has seen initial take up of vacant city and property companies seeking but are sitting and waiting as a centre retail space albeit on flexible asset management opportunities. Kevin Burke FRICS, Frederick Holt & number believe commercial property terms and heavily incentivised. Company, South London, 020 7582 will be cheaper in the new year.

9375 - Despite the negative SOUTH EAST Prime and south east holding up Charles Fifield FRICS, Fifield Glyn, economic outlook, demand to lease well.Outside south east , secondary , Cheshire, 01606 351 351 - There and buy remains steady. tertiary property is difficult and has been an unusual increase in Craig Powell MRICS, Holloway Iliffe getting cheaper . High street retail is demand over the past few months. & Mitchell, Southampton, 023 9237 particularly under pressure with NORTH EAST Retail demand usually tails off by 7800 - A large amount of recently increased vacancy and likely to get November, however demand has constructed Grade A office space worse post Christmas . stayed with occupiers looking at remains unoccupied at Solent Niall Deas MRICS, Robertson opening in the new year. We have Business Park, Fareham and this is Chris White MRICS, White Simpson Limited & Chadwick also seen a return in interest from A5 stopping development of consented Commercial Surveyors Ltd, Banbury, Property Cons, Sunderland, 0191 Hot Food Takeaways. There seems Southampton City Centre schemes 01295 271000 - Substantial activity 493 4890 - Landlord's and vendors to be more demand from short term such as Mayflower Point, when there in the larger industrial market are making further adjustment to office occupiers as well. is such an unequal balance between coupled with a revival in the incentives which is attracting supply and demand. Older out of acquisition of sites by developers for significant interest. Martin Walton FRICS, Waltons, town offices with good parking ratios, Industrial D&B development. Tameside, 0161 367 9500 - A lot of that have been refurbished to a high Constraints on the supply of existing David Jackson BSc MRICS, people remain to be convinced we standard are finding tenants when Industrial premises. Retails and Sanderson Weatherall, Stockton, have reached the bottom of the new space being offered at premium Office markets are dominated by 01642 426914 - There has been market , once they do I expect rents are standing empty. limited demand and in the main slightly more movement in the last 3 improvement in activity if not values conurbations excess supply. months but many occupiers are still Tom Holloway BA (Hons) MRICS, cautious and hampered by a lack of Simon Adams FRICS, Peill & Holloway Iliffe & Mitchell, Eloise Payne Bsc (Hons), East finance. We are unlikely to see any Company, Cumbria, 8454504444 - Portsmouth, 2392377800 - Within Sussex County Council, Lewes, spec building whilst empty rates are Still nervousness in the market, both the southern Hampshire region there 1273482172 - The past six months it enforced which is stifling the market from investors and occupiers, driven is a inconsistent level of enquiries, has been increasingly difficult to find and reducing the supply of quality, heavily by negative media sentiment. with the office market being the tenants and we are looking at environmentally friendly Various occupiers have the appetite worst performer, this is compounded downsizing our corporate office accommodation. to do deals, but confidence varies. by soft deals being carried out at portfolio due to vacant spaces. There

1000 Lakeside, Portsmouth and is more than enough space for Bill Naylor FRICS, Naylors Chartered Mike Redshaw MA FRICS, Nolan consequently sucking in office County Council staff especially with Surveyors, Newcastle, 0191 232 Redshaw, Bolton, 0161 7630823 - occupiers from the surrounding the increase of hot desking and other 7030 - Offices are massively Despite diffcult current market region. The knock on effect is falling flexible working patterns. There are a oversupplied particularly out of town conditions interest in the UK coal rents in the rest of the market! number of projects that have and demand is poor, the industrial cutacre site on the M6 have been suffered uncertainty and/or delays in market is holding up but retailing is extremely strong which confirms the Chris Ridge MSc FRICS, London particular road scheme continuing to struggle with few doing attractiveness of well positioned Clancy, Southampton, 023 8033 developments. Furthermore, well. The lack of cohesive regional distribution sites on the M6. 0442 - Occupier demand across all improvement works have been policy and representation is harming sectors is very patchy. Occupiers are reduced due to lack of budget funds. the North East economy as a whole still seeking significant incentives

and time taken to complete transactions is increasing. Availability of bank funding remains limited. Investors are becoming increasingly selective and looking for good value. Buying opportunities for investors are limited.

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5 RICS UK Commercial Market Survey Q4 2011

Matthew Pellereau FRICS, Matthew Dean Speer MRICS, Myddelton & Gareth Williams FRICS, Gareth Jonathan Owens MRICS, Arkwright Pellerau Ltd, Camberley, Major, Salisbury, 01722 337577 - Williams Commercial, North Wales, Owens, Hereford, 1432267213 - It is 1276601791 - We still live in difficult Enquiries from occupiers have 01745 330077 - Locally sourced difficult to provide 3 monthly times but some deals are being done dwindled as the second quarter has demand for secondary retail and snapshots of the market especially in but it's very hard work getting any progressed and the “bad news” from smaller industrial/distribution units a small rural city - enquiries always completed . Not unlike the early Europe has eroded confidence in the continues to be encouraging. “tail off” in winter and generally pick- 1990s or mid 1970s . future. Bank funding remains scarce However, prime retail and larger up in spring. and difficult to grasp. industrial units continue to be difficult Charles Stevens MRICS, Maple as does the office sector. Carole Taylor MRICS, BNPParibas Burton, London, 0203 370 6001 - Peter Foyle FRICS, Bruton Knowles, Real Estate, Birmingham, 0121 237 Levels of office demand/ Investment Gloucester, 01452 880152 - Rowland Jones FRICS, Rowland 1200 - Availability of investment market interest polarises between Redevelopment plans have have Jones Chartered Surveyors, funds - this varies according to 'inside' and 'outside' the N Circular. been approved for St Oswalds Park Swansea, 00 44 1792 648809 - It is sector. There is increased private Out of town, things remain difficult. with Tesco proposing to redevelop difficult to establish any pattern as it money available but fund money has There is much more attention and their existing site in the retail park is events far outside our control that decreased. confidence (developers, investors, with a new food store and additional a influencing the process. occupiers and so on), the closer one retail units totalling 165,000 sq ft of Richard Day Bsc (HONS) MRICS, moves in towards 'W1'. gross retail space. Plans are now Ben Bolton MRICS, Cooke & Daniel & Hulme, Stoke on Trent, awaited from developer Stanhope Arkwright, Cardiff, 02920 346376 - 01783 213344 - The market is still Damian G Comerford FRICS, who are Gloucester City Council’s Take up has concentrated on city very difficult with potential occupiers Dunster & Morton, Reading, 0118 preferred developer for the centre properties which accounted demanding further reductions in rent 955 1700 - The market is dominated redevelopment of Kings Quarter with for 43% of overall take up during Q3. and higher incentives. by enquiries from existing tenants 200,000 sq ft of new and Most of this take up was of Grade B wishing to exercise “break clauses” replacement retail floor space. space. Deals are mainly for Tony Rowland MRICS, Timothy Lea or threatening to exercise &“break companies occupying less than & Griffiths, Evesham, 01386 765700 clauses“ to take advantage of the Andrew Kilpatrick, Kilpatrick & Co, 5,000 sq ft. Available Grade A space - Its a very tough market, void rates, incentives on new lettings often at Swindon, 01793 643101 - The continues to decrease following increased car parking charges, and lower rentals or with large rent free Eurozone crisis and general several lettings in Cardiff Waterside the general recession has all but periods. economic gloom is doing little to and ING committing to reoccupy the killed demand for town centre assist market confidence, in first floor Callaghan 2 which was property in Evesham. In rural Stephen Bailey-Kennedy, Duncan & Swindon, or elsewhere and with formerly on the market. Total vacant locations, there is still some demand, Bailey-Kenndy, High Wycombe, growth forecasts trimmed back to space has steadily fallen over the but it is sluggish. Something needs 01494 450951 - We are seeing a under 1% for 2012, market last 3 years. to kick start the economy. slow take up of mainly good quality conditions are likely to remain office space which will result in a difficult for 2012. Chris Sutton MRICS, Jones Lang Jonathan Carmalt MRICS, Jones reduction in available stock within the LaSalle, Cardiff, 029 2022 7666 - Lang LaSalle, Birmingham, next 12/18 months as no new Michael T Ripley FRICS, Stephen & The office market has benefitted 01212149935 - Trend for secondary developments is taking place. Co., Weston Super Mare, 01934 621 from the continued expansion of pricing to move out further and prime 101 - The level of enquiries has been Admiral Insurance in Cardiff, to remain stable but scarcity of reasonable but most deals have Swansea and Newport. However, the product may lead to yield SOUTH WEST been incentive led with landlords public sector is actively seeking to compression (at the prime end). keen to minimise exposure to rates reduce the size of its estate with a Viewings are slightly better for office

liability. number of high profile buildings property, but decision making is still Alistair Edgcumbe FRICS, Larkman recently vacated. Developer J R protracted and confidence thin. Edgcumbe, Taunton, 01823 323523 Chris Wilson BSc FRICS Minst D, Smart is leading from the front with - A sluggish end to a year that hasn't Goadsby, Poole and Bournemouth, further speculative development Roger Wilkins FRICS, Wilkins seen any records broken. However, 01202 550000 - Good demand for planned Capital Quarter scheme, Chartered Surveyors, Worcester, there are retail sectors that are active small freeholds off plan on 2 located south of Cardiff city centre. 01905 723722 - The market remains and its not all doom and gloom on speculative industry schemes in difficult in all sectors. The brightest the high street. Nevertheless, until Dorset. situation remains in industrial the macro economic problems in the Adele Paterson MRICS, Burnett properties, with smaller light UK and the eurozone chaos is Robert Smith BSc, Ash & Co, Davies, South Wales, 029 2062 1162 industrial units remaining quite well sorted, it looks as if we will remain in Gloucester, 01452 300433 - Good - In general the market seems let, although more price sensitive the doldrums, a situation which could quality stock is attracting enquiries stagnant, there is an over supply of than hitherto, and demands for rent now last for several years. and results in transactions. secondary office space and a lack of frees on lease renewals. The take-

Secondary retail market is fairly demand resulting in increased up on offices remains problematic, Simon Pontifex FRICS, SPA buoyant. Over-supply of offices in incentives for tenants. with good deals for tenants right (Chartered Surveyors), Cheltenham, and out of town. across the board. In retail, Worcester 01242 255242 - Applicant numbers has remained quite well let, but the have been maintained at a low level omens for the new year are not very but the number of transactions has WALES WEST MIDLANDS good. increased.

Stephen Smith MRICS, Fraser Wood Michael S Nightingale MRICS, Miller Jonathan Smart MRICS, DTZ, Robert Rae Bsc FRiCS, North Rae Mayo & Pinson, Walsall, 01922 629 Commercial, Truro, 01872 247000 - Cardiff, 029 2026 2232 - Office - Sanders, Coventry, 024 766 36888 - 000 - The market remains difficult Activity levels remain low when Ongoing occupier uncertainty. The auto-motive market is helping and 2012 is likely to be another compared with the same period last Limited enquiries across the board. drive manufacturing enquires to circa challenging year. year. We are still seeing little Limited Grade A availability, 30 % with improved uptake of stock evidence of increased bank lending particularly within Cardiff City Centre. reducing supply in industrial and do not expect the position to Sentiment remains poor. Industrial - warehouse market across all sizes. change in the coming months. still a focus on good quality on the Market is tempered by euro and M4 corridor. More agent lead banks. However firms are also doing John Plimmer FRICS, Chesterton requirements and larger national some design and build. Humberts, Taunton, 01823 331234 - companies looking to take advantage We remain busy in a very difficult of lease end/breaks to expand or market. amalgamate.

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6 RICS UK Commercial Market Survey Q4 2011

YORKS HUMBER NORTHERN IRELAND

David J Matindale, FSL Commercial Rory McConnel MRICS, McConnell and Residential, Wakefield, 01924 Chartered Surveyors, Belfast, 365250 - There are a lot af vacant 2890205900 - Northern Ireland is still office properties on the market at experiencing very difficult conditions present. with an increasing lack of confidence contributing to an already subdued Richard Flanagan MRICS, Lawrence market. Hopes are still pinned on Hannah LLP, York, 01904 659800 - increasing inward investment Enquiry levels remain low for particularly in the office sector and, occupier markets, with lack of to be fair, there have been a few confidence cited as reason for not highlights this year, in particular Allen making decisions. & Overy's 34,000 sq ft leasehold office acquisition at Obel Tower. Max Reeves, Reeves and Co., York, 01904 682804 - There has been a uplift in occupier requirements over the past few months although we do not foresee this as a market shift and expect demand to remain weak throughout 2012.

Michael Hare FRICS, Feather Smailes Scales LLP, Harrogate, 01423 501211 - It is still a very hard market which shows no indication of improving in the short to medium term. The worries over European sovereign debt, the threat of going back into recession and the continuing lack of funding from banks are all influencing the market with limited confidence in the business community to do anything but “sit tight”. Refreshingly we saw a good November in terms of deals agreed but this is probably no more than a blip.

David E Watson BSc FRICS, Fawley Watson Booth, Leeds, 0113 234 7900 - The growing and most worrying trend in recent months has been the lack of decision-making apparently taking place. A lot of people dashing about madly looking at things which they are then failing to progress. Whilst all the news coming out in the economy is so gloomy, a further dip seems inevitable. If it was not going to happen anyway the general lack of enthusiasm from businesses to move forward will create another period of recession as a self-fulfilling prophecy.

Graeme Haigh MRICS, Bramleys, Huddersfield, 01484 530361 - Slightly stronger close to the year than the opening gives some optimism for 2012. Lets just hope its not another false dawn. Eurozone uncertainty continues to affect sentiment but the British keep calm and carry on; mentality appears to be winning through.

7

7 RICS UK Commercial Market Survey Q4 2011 Contributor details EAST MIDLANDS Bill Peach, Cushman & Nick Sullivan BA Tim Richards MRICS, Joe Assalone DipArb William Bradley, Lam- Wakefield, London MRICS, Dobbin & Sulli- Aston Rose, London MCIArb IRRV, Robert bert Smith Hampton, van, Docklands Pinkus & Company, Alan Faulkner MRICS, Nottingham Charles Killen BSc Tom Dymond MRICS, Preston Maxey Grounds & Co MRICS, E A Shaw & Phillipa Jeal MRICS, SGP Property & FM, Mark Diaper MRICS, LLP, Wisbech EASTERN Company, Mid-Town Phillipa Jeal Retail London Legat Owen, Chester Property Consultants Alex Reid MRICS, Andrew Bastin FRICS, Charles McClean London Tunde Adegbemile Matthew Illingworth Mather Jamie, Leices- Bastin Steward, Nor- MRICS, CJ McClean MRICS, DTZ, London MRICS, Cushman & tershire wich Associates Ltd, London Roland Williams Wakefield, Manchester MRICS, Tuckerman NORTH EAST Andrew Nichols MRICS, Craig Knights BSc Chris Currell MRICS, Commercial Ltd., Lon- Mike Redshaw MA Gadsby Orridge, Derby- (Hons) MRICS, Arnolds Currell Commercial, don Bill Naylor FRICS, Nay- FRICS, Nolan Red- shire Chartered Surveyors, London lors Chartered Survey- shaw, Bolton Norwich Simon Kibble As- ors, Newcastle Andrew Woods FRICS, Chris Lloyd FRICS, socRICS, Frost Mead- Paul Marshall MRICS, Harwoods, Wellingbor- Edd Fitch MRICS, La- Blanchflower Lloyd owcroft, London - Ken- David Jackson BSc Morris Dean, Rochdale ough Salle Investment Man- Baxter, West End sington & Chelsea MRICS, Sanderson agement, London Weatherall, Stockton Simon Adams FRICS, Ben Coleman BSc Chris Lloyd FRICS, William Peach FRICS, Peill & Company, Cum- FRICS, Ben Coleman Ewan Dodds FRICS, Blanchflower Lloyd Cushman & Wakefield Niall Deas MRICS, bria Associates, Northamp- Whybrow, Colchester Baxter, Mid-Town LLP, London Robertson Simpson ton Limited & Chadwick Stephen Sewell MRICS, Jonathan Lloyd MRICS, Chris Lloyd FRICS, GREATER LON- Property Cons, Sunder- Walton Goodland, Car- Blanchflower Lloyd lisle Chris Roper, Chesterton Hazells Chartered Sur- DON land Baxter, City Humberts, Grantham / veyors, Bury St Ed-

Nottingham munds Adrian Brace MRICS, Simon Hill MRICS, NORTHERN IRE- Chris Lloyd FRICS, The Heritage Founda- Jones Lang Lasalle, LAND Blanchflower Lloyd G S Freckelton FRICS, Michael Davies BSc tion, Letchworth Garden Newcastle-Upon -Tyne Baxter, Kensington & Freckeltons, Loughbor- MRICS, Daies & Co., City Brian Kennedy FRICS, Chelsea ough Hatfield NORTH WEST O'Connor Kennedy

Alastair Mason FRICS, Turtle, Belfast Chris Lloyd FRICS, Graham Freckelton Michael Davies BSc Bunch & Duke, Hack- Andrew Allmark Blanchflower Lloyd FRICS, Freckeltons, MRICS, Davies & Co., ney, London E8 MRICS, Whitecroft Brian Kennedy FRICS Baxter, Westminster Loughborough Stevenage Green Limited, Bolton FCIArb, O'Connor Ken-

Bob Ashton MRICS, nedy Turtle, Belfast Christopher Pryke, Ian Leather, Lambert Mike Sumpster FRICS, Cherryman, London Antony Hill FRICS, George Trevor and Smith Hampton, North- Barker Storey Mat- Docklands Antony Hill Partnership, Brian Turley MRICS, Associates, London ampton thews, Cambridge Southport Turley Property Con-

Chris Mitchell MRICS, sultants, Newry Edward Hiller FRICS, J A Smith, FRICS, R Philip Woolner MA DohertyBaines, London Brent Forbes BSc Hiller & Partners, Lon- Longstaff & Co, Spal- MRICS, Cheffins, Cam- MRICS, Petty Chartered Daragh Mallon MRICS, don ding bridge George Palos , Ander- Surveyors, Burnley Best Property Services,

son Wilde and Harris, Newry Fabrizio de Corato, Jonathan Hubbard Sam Kingston MRICS, London Charles Fifield FRICS, UBS, London MRICS, Ward Survey- Roche Surveyors, Nor- Fifield Glyn, Cheshire Rory McConnel MRICS,

ors Ltd, Hinckley wich John Fowler BSc McConnell Charteed GCJ Lloyd FRICS, FRICS, Lambert Smith Chris Draper BSc Surveyors, Belfast Blanchflower Lloyd Kevin Skipworth, Stur- Simon Beeton MRICS, Hampton, Milton MRICS, Tushingham Baxter LTD, London gis Snow and Astill, Derrick Wade Waters, Keynes Moore, Manchester SCOTLAND Leicester Harlow Guy Bowring MRICS, Joshua Pater, Colliers Ian Hill FRICS, Ryder Tuckerman Commercial Alan Gilkinson, Ryden, Mike Hammans MRICS, Stuart King BSc CRE, Heathrow and Dutton Ltd, Oldham Limited, Victoria Glasgow Hammans Property MRICS, Davies King

Consulltants Notting- Chartered Surveyors, Justin Clack RICS, Joe Assalone DipArb James Roberts, Knight Alison Munro MRICS, ham, Nottingham Letchworth Garden City Frost Meadowcroft, FRICS MCIArb IRRV, Frank, London Dunbar Management London (Hammersmith Robert Pinkus & Com- Investments Limited, Nick Hammond, Lam- Tony Barker BSc & Fulham and Chiswick pany, Kendal Keith Holihead MRICS, Edinburgh bert Smith Hampton, FRICS, Barker Storey Kinney Green, London Nottingham Matthews, Peterbor- Kevin Burke FRICS, Joe Assalone DipArb Allan Lapsley BSc ough Frederick Holt & Com- FRICS MCIArb IRRV, Kevin Kemplen MRICS, FRICS MCIArb, Speirs Nigel J B Carnall pany, South London Robert Pinkus & Com- Kinney Green, London Gumley, Glasgow FRICS, W A Barnes, pany, Lancaster

Nottingham CENTRAL LON- Neil Salisbury MRICS, Kim White MRICS, Angela Lowe MRICS, Michael Rogers, Joe Assalone DipArb DON Kinney Green, City of Cushman & Wakefield, Stephen Smith BSc. Sevenoaks FRICS MCIArb IRRV, London Edinburgh FRICS, Blacklee Smith Robert Pinkus & Com- Andrew Farquhar LLP, Northampton Nick Sullivan BA pany, Blackpool MRICS, Masons Prop- Neil Prince MRICS, Charles Lawrence MRICS, Dobbin & Sulli- erty Advisers City, Lon- Matthews & Goodman, MRICS, Ryden LLP, Tim Richardson BSc van, East London Martin Walton FRICS, don London West End Inverness MRICS, Innes England, Waltons, Tameside

Derby

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8 RICS UK Commercial Market Survey Q4 2011

Craig R Watson Dean Speer MRICS, Rowland Jones FRICS, Roger Wilkins FRICS, MRICS, Craig Watson Ian Bell FRICS, Pear- Myddelton & Major, Rowland Jones Char- Wilkins Chartered Sur- Property Consultants, sons Commercial, Win- Salisbury tered Surveyors, Swan- veyors, Worcester Edinburgh chester sea John Plimmer FRICS, Stephen Smith MRICS, Gillian Giles MRICS, James Stefanopoulos Chesterton Humberts, Fraser Wood Mayo & Cushman & Wakefield, MRICS, Cluttons, Maid- Taunton WEST MIDLANDS Pinson, Walsall Glasgow stone David Cowling FRICS, Andrew Venables Tony Rowland MRICS, James S MacDonald, Jeremy Braybrooke Cowling & West, MRICS, GVA, Birming- Timothy Lea & Griffiths, JSM Developments, MRICS, Osmond Bournemouth ham Evesham Edinburgh Brookes, Southampton Paul Whitmarsh Carole Taylor MRICS, YORKS HUMBER Paul RIchardson John Wittebolle FRICS, MRICS, Whitmarsh BNPParibas Real Es- MRICS MRICS, Ryden, John M Wittebolle, Lockhart, Swindon tate, Birmingham Barry Seal MRICS, Aberdeen Cranleigh Wilbys, Barnsley Peter Foyle FRICS, Charles Toogood, GVA, Matthew Pellereau Bruton Knowles, Birmingham Ben Aspinall MRICS, SOUTH EAST FRICS, Matthew Pel- Gloucester AspinallVerdi, Leeds lerau Ltd, Camberley Charlotte Fullard Andrew Archibald Andrew Kilpatrick, MRICS, Halls David E Watson BSc MRICS, Keygrove Char- Neil Slaisbury MRICS, Kilpatrick & Co, Swin- (Worcester) LLP, FRICS, Fawley Watson tered Surveyors, South- Michael Rogers, Tun- don Worcester Booth, Leeds ampton bridge Wells Adrian Rowley MRICS, Christian Smith MSc David J Matindale, FSL Andrew Hodgkinson Nigel Angus FRICS, Alder King, Gloucester MRICS, GBR Phoenix Commercial and Resi- MRICS, Goadsby, Huggins Edwards & Beard, Birmingham dential, Wakefield Southampton Sharp, Epsom Lloyd Smale FRICS, Drew Pearce, Exeter David Holt BSc FRICS, Graeme Haigh MRICS, Brian Pickett MRICS, Scott Tyler MRICS, D & P Holt, Coventry Bramleys, Huddersfield Woodford and Com- Allsop LLP, London Michael T Ripley pany, Basingstoke FRICS, Stephen & Co., David Perrin FRICS, Malcolm Stuart FRICS Sean Kaufmann, Clut- Weston Super Mare Nock Deighton, Shrop- IRRV (Hons), Malcolm Charles Stevens tons, Chichester shire Stuart Property Consult- MRICS, Maple Burton, Chris Wilson BSc ants LLP, West York- London Stephen Bailey- FRICS Minst D, Graham Jones MRICS, shire Kennedy, Duncan & Goadsby, Poole Kingston CPC, Lichfield Chris Ridge MSc Bailey-Kenndy, High Mark Brearley MRICS, FRICS, London Clancy, Wycombe Chris Wilson BSc Jonathan Carmalt Mark Brearley & Com- Southampton FRICS Minst D, MRICS, Jones Lang pany, Bradford Stuart Jerden BA Goadsby, Bournemouth LaSalle, Birmingham Chris White MRICS, FRICS, Pearson Gore, Max Reeves, Reeves White Commercial Sur- Ramsgate Robert Smith BSc, Ash Jonathan Owens and Co., York veyors Ltd, Banbury & Co, Gloucester MRICS, Arkwright Stuart King BSc Owens, Hereford Michael Hare FRICS, Colin Davies FRICS, MRICS, Davies King Lloyd Smale FRICS, Feather Smailes Scales Graves Son & Pilcher Chartered Surveyors, Drew Pearce, Exeter Jonathan Preece LLP, Harrogate LLP, Brighton Letchworth Garden City MRICS, Jonathan D WALES Preece, Ross on Wye Richard Corby BSc Colin Greenstreet, Fell Tom Holloway BA Herefordshire (Hons) MRICS, Edward Reynolds, Folkestone (Hons) MRICS, Hollo- Adele Paterson MRICS, Symmons LLP, Leeds way Iliffe & Mitchell, Burnett Davies, South Mark Lenton FRICS, Craig Powell MRICS, Portsmouth Wales KWB Propertty Man- Richard Flanagan Holloway Iliffe & agement Ltd, Birming- MRICS, Lawrence Han- Mitchell, Southampton SOUTH WEST Ben Bolton MRICS, ham nah LLP, York Cooke & Arkwright, D Dodgson MRICS, Alistair Edgcumbe Cardiff Martin Bloomer FRICS, Martin-Brown, Dorking FRICS, Larkman Edg- Martin Bloomer Associ- cumbe, Taunton Chris Sutton MRICS, ates Ltd, Dudley Damian G Comerford Jones Lang LaSalle, FRICS, Dunster & Mor- Simon Pontifex FRICS, Cardiff Richard Calder FRICS, ton, Reading SPA (Chartered Survey- Calders Chartered Sur- ors), Cheltenham Gareth Williams FRICS, veyors, Tamworth Duncan Campbell Gareth Williams Com- MRICS, Campbell Gor- Michael S Nightingale mercial, North Wales Richard Day Bsc dan, Bracknell MRICS, Miller Commer- (HONS) MRICS, Daniel cial, Truro John Jones BSc (Hons), & Hulme, Stoke on Duncan Campbell Cooke & Arkwright, Trent MRICS, Campbell Paul Maguire FRICS, Cardiff Gordon, Reading John Ryde Commercial, Robert Rae Bsc FRiCS, Cheltenham Jonathan Smart North Rae Sanders, Eloise Payne Bsc MRICS, DTZ, Cardiff Coventry (Hons), East Sussex County Council, Lewes

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9 RICS UK Commercial Market Survey Q4 2011 RICS contacts

RICS Commercial Market Survey Management

Matthew Edmonds Economist T: +44 (0)20 7695 1684

[email protected]

Josh Miller Senior Economist T: +44 (0)20 7334 3777

[email protected] Methodology

Questionnaires were sent to real estate organisations on 1st December 2011, with responses received up until the 19th of December . Respondents were asked to compare conditions over the latest three months with the previous three months. A total of 189 responses were received.

Responses have been amalgamated across the three real estate sub-sectors of offices, retail and industrial property at a country level, to form a net balance reading for the commercial market as a whole.

To subscribe, please contact the BCIS on [email protected] or telephone +44 (0)20 7695 1500 for further information.

For contributor database enquiries, please contact Janet Guilfoyle on +44 (0)20 7334 3890.

The subscription rates for monthly RICS surveys (Housing) are:

Non RICS members £365 per year

RICS members £305 per year

The subscription rates for RICS quarterly surveys (Construction, Commercial Property and Residential Lettings), are:

Non RICS members £245 per year

RICS members £180 per year

The subscription rates for the semi-annual RICS Rural Market Survey are:

Non RICS members £120 per year

RICS members £95 per year

The subscription rates quoted above are subject to change please consult RICS web site - www.rics.org for confirmation.

The Royal Institution of Chartered Surveyors Parliament Square London SW1P 3AD

T +44 (0)20 7222 7000 F +44 (0)20 7334 3795

RICS represents 100,000 members worldwide. These professionals provide expert [email protected] advice on land, property, construction and the associated environmental issues. An independent organisation, RICS acts in the public interest, upholding standards of www.rics.org competence and integrity among its members and providing impartial, authoritative

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