Occupier demand rental growth "strengthens" - commercial mortgages

30 October 2006

Investors with commercial mortgages have benefited from stronger occupier demand and rental growth, according to a new study.

The latest report by the Royal Institution of Chartered Surveyors (Rics) reveals that rents have increased by an average of 3.2 per cent in the year to September.

Rents in commercial property have increased at their fastest pace for five years, due largely to the strength of office properties which out-performed retail space for the first time. Industrial properties demonstrated more stable rents also.

Rics comments: "Occupier demand in the commercial property market has strengthened in line with the improving economy.

"Investment demand across all three sectors of the commercial property market stayed strong in August."

The new report confirms the findings of an earlier survey published in August, in which Rics reported that rental growth for office property had begun to "pick up", rising by 2.9 per cent.