The Q4 2020 RICS UK Commercial Property Survey shows prevailing challenging conditions in the market evidenced by the continued rapid rise in the availability of retail and office space across the country.
The picture is not completely bleak though. The industrial sector saw activity strengthen once again as occupier and investor demand strengthened noticeably.
There’s no doubt that the pandemic is impacting the types of commercial property that is in demand. When you dig beneath the surface there is an indication that warehouse and distribution sectors are benefitting from the shift to online retailing.
Similarly, the lockdown has led to enforced homeworking for many office workers. While this may be a temporary measure, it is anticipated that many employers will opt for a hybrid approach with some days worked at home and some in the office – a solution that would require reduced office space.
The counter-balance of course are those businesses where people must attend the office. In these businesses, greater office space may be required to accommodate social distancing measures.
With much of Q1 2021 likely to be spent in lockdown, I am anticipating a continuation of these trends. However, by Q2 the rollout of the vaccination programme may lead to us seeing a gradual return to normal life and with that, greater economic activity.