Activity in the Welsh commercial property market continued to weaken in the first three months of this year as investor and occupier demand fell due to continuing inflationary pressures. According to the latest RICS commercial property monitor for Q1 2023, occupier demand remained in negative territory for the third consecutive quarter at a net balance of -23%, with Wales the weakest out of all the UK regions.
Occupier demand for retail and office property also fell with the monitor recording a net balance of -36% and -33% respectively. While the report found industrial demand had flatlined. In the investment market, the net balance was -14% in Q1 2023, an improvement from -48% in Q2 2022. Both office and retail continued to see declines in investment enquiries (net balances of -27% and -33% respectively).
However, the industrial sector saw renewed momentum with increases in investment enquiries at a net balance of 18%, up from -35% on the previous quarter. Capital value expectations in the industrial sector were also positive with a modest rise at a net balance of 10%. Though the general outlook on capital values in Wales is predicted to fall over the next quarter.
