Fisher German launches commercial benchmark index

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News article

Fisher German launches commercial benchmark index

July 2015

commercial news

Fisher German launches commercial benchmark index

The commercial property team have launched their own benchmarking survey using RICS indicators as a gauge to what should be measured.

Every 6 months, the team will be asked to report on their experience of the market in their geographic region. Over time this will create a valuable benchmark for Fisher German to analyse how each of their regions are performing in the commercial market. 

The first six months reports on some interesting findings, a brief summary of these are;

Supply is decreasing due to the higher demand and take up of available space, so we are seeing more demand but less to sell and/or let.

As quick as office and industrial space is being made available it is being snapped up. Retail space is more stagnant and there is a lower volume of available space.

The need for inducements to take leases is decreasing with industrial incentives reducing the fastest.

Demand is strongest for industrial space, with a limited number of new builds on the horizon. As supply tightens, we will see rents rise. The office and retail markets are falling behind.

Investment enquiries are up in industrial and retail but not office. Kevin Benson head of commercial comments “The market seems a little nervous of the office sector although most recently we are starting to see some improvement.  Yields generally for good quality smaller offices are 8.5% to 10% with two modern offices selling last week at 8.91% and 9.89%, both of these were modern units on business parks. In terms of retail yields, well secured retail to good covenants can achieve around 6 to 7%. Those on shorter lease terms and in less sought after locations are typically 8 to 8.5% and secondary retail is typically 10% plus”.   

With rents looking likely to increase, especially in the industrial market, we will see capital values also increase. Perhaps not in the next 6 months but definitely expected in the next 12 months. 

The Fisher German commercial benchmark survey is a newly launched index which has been running for 6 months. Fisher German commercial surveyors from across the Midlands (North, East, South, West and Central) answer 10 questions focussing on their respective regions to give Fisher German a firmwide and also a geographic split of how the commercial property market is performing. All questions are broken down by office, industrial and the retail sector. At the time of writing six Fisher German offices are participating in the survey and between them have 145 commercial properties available for sale or let. 

If you have any questions regarding the index, these can be directed to Kevin Benson or Jason Hercock. 

Please email kevin.benson@fishergerman.co.uk or Jason.hercock@fishergerman.co.uk

For further information about our Commercial sector, click here

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