Comment on RICS' Q1 2025 UK Commercial Property Monitor

The RICS has just published its first quarterly UK Commercial Property Monitor for the year, reporting that “Market conditions remain generally subdued although faint signs of improvement visible in some areas”.

In reviewing and commenting on the latest report, Lincoln Director William Wall confirmed that Eddisons’ agency experience and sense of the market across the East Midlands and Eastern regions during the first quarter of the year was broadly in line with that of the UK-wide and regional trends outlined by the RICS.

While not as big a bounce-back as might have been anticipated, from the shockwaves of the domestic post-Budget market, business sentiment is coming to terms with the implications. An international backdrop still dominated by war in Ukraine and the USA’s trade tariff pivoting continues to shape the market.

With the prospect of successive interest rate reductions, Eddisons is beginning to see a shift in the mega-sheds market again in its key East Midlands and East of England areas, with third party logistics (3PL), parcel delivery and online retail occupiers leading the way.

Location and scale remained the drivers in this important layer of the industrial market as the year got underway, and the development lag caused by the recent high interest rates is putting pressure on supply and should drive rental growth.

According to Eddisons’ agents, the squeeze on supply in core locations is leading to a two-tier market of the ‘best and the rest’ for industrial stock. But where there is demand, if the property is of good quality and priced well, it is likely to shift. Other locations are described as ‘patchy’ and certain non-industrial sectors as ‘active but a little subdued’.

However, reflecting on the RICS Q1 monitor and looking forward to the remainder of the year, William Wall commented, “Notwithstanding geopolitical events, we are cautiously optimistic at our regional agency level.

“There’s a definite shift in the mood music as we enter the second quarter, expecting trickle down from the top of the industrial sector. Investors and businesses who chose to sit out the past two and a half years are now making moves again and looking at bricks and mortar for long-term asset value.

“The prospect of the UK General Election dominated the first two quarters of last year, the remainder of this year is when the Government’s pro-growth agenda really needs to kick into gear.”