Suburban office locations are set to flourish in the wake of the Covid-19 pandemic, according to a new survey from the Royal Institute of Chartered Surveyors.
In the RICS Q2 UK Commercial Property Survey, 64% of respondents answered yes when asked whether they felt demand for office space in suburban locations is likely to rise over the next two years.
In addition, anecdotal evidence from the survey shows that there could be a shift towards a demand for higher quality office space, with an increased focus on wellbeing and sustainability.
These findings represent good news for landlords with quality out-of-town office space as companies take the decision to relocate their operations away from major city centres.
With the increase in the prevalence of home working, the RICS survey also shows that rents are due to fall significantly across the office and retail sectors in the year ahead, reflecting a decline in tenant demand.
However, on a more positive note, other evidence from the survey shows that local shopping behaviour may be on the increase which could lead to a much-needed revival of the local high street retail environment.
Tarrant Parsons, RICS Economist, says: “The latest survey feedback unsurprisingly reflects the significant disruption and uncertainty that emerged across the economy during the lockdown period.
“With demand from both occupiers and investors falling sharply, respondents now anticipate rents and capital values will come under downward pressure while the market adjusts to a drastically changed economic environment.
“In particular, the recent shift into remote-working raises many questions across the office sector, with respondents expecting businesses to re-evaluate their office space requirements over the next two years. On a brighter note, the outlook is already showing signs of recovery across the industrial sector, which remains set to benefit longer-term from an acceleration in the growth of ecommerce.”