Commercial rents climb 9.7% in the last year

Following a decline of 2.9% during 2021 and 2022, commercial rents are strengthening across Britain, up 9.7% annually standing at an average of £1,036 per week.

Related topics:  Landlords,  Property,  Rent,  Commercial
Property | Reporter
15th May 2023
commercial
"There are some very positive signs on the ground when it comes to the rental values being achieved across many parts of the UK, as well as the strong growth they’ve shown in the last year alone"

Market analysis by debt advisory specialists, Sirius Property Finance, analysed current commercial rents across each region of Britain and how they have changed over time.

At present, average commercial rent sits at £1,036 per week, reversing the previous downward trend, whereby commercial rental values had fallen by -2.9% between April 2021 and April 2022. What’s more, the average commercial rent secured across Britain at present also sits at 42% higher than the pre-pandemic market.

The North West has seen the biggest uplift in commercial rental values over the last year, increasing by 88.7%. In Wales, commercial rents are up 40.8% annually, while the North East (39.2%) and the East of England (21.6%) have also seen notable growth.

Commercial rental values are also up across Yorkshire and the Humber and the South West, albeit by a more marginal level at 5.3% and 3.6% respectively.

However, despite strong topline growth, commercial rental values haven’t rebounded across every region of Britain.

Across the South East, they are down -18.4%, with the West Midlands (-14.6%) and East Midlands (-12.9%) also seeing a double-digit reduction since last year.

Again, London (-4.6%) and Scotland (-2.6%) have also seen a less severe reduction in commercial rental values.

Despite this, signs of strong positive growth will be warmly welcomed by the sector and shout help to rejuvenate investor confidence, as previous research by Sirius Property Finance has shown that investment within the commercial sector has taken a dive, with a decline in industrial investment driving this decline.

Managing Director of Sirius Property Finance, Nicholas Christofi, commented:

“Just as the commercial sector looked to be overcoming the impact of the pandemic, it’s been further hit by the economic uncertainty that has enveloped Britain in recent months.

"However, there are some very positive signs on the ground when it comes to the rental values being achieved across many parts of the UK, as well as the strong growth they’ve shown in the last year alone.

"In this respect, the commercial sector has not only rebounded from its pandemic-induced slump but it’s moved beyond the pre-pandemic benchmark, with commercial rents now higher across every region but three when compared to 2019.

"With commercial property investment declining in recent times, this strong growth should help reassure investors that the commercial sector still has a great deal to offer and that commercial rentals remain a profitable endeavour.”.

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