UK commercial property market sees mixed demand and rent optimism in Scotland and Wales

A RICS commercial property monitor shows occupier demand remaining muted across the UK in Q2, with divergent trends in Scotland and Wales.

In Scotland, office demand rose, with a net balance of 14% of respondents noting increased interest, and industrial demand also grew (25%). Retail demand fell by 25%. Optimism about rents is strongest in the office sector, where 48% expect rent increases over the next three months, and 32% expect overall commercial rents to rise. Capital‑value expectations are positive, with 44% anticipating higher values, especially for office and industrial space.

In Wales, occupier demand stayed flat for office space and fell for industrial (-8%) and retail (-14%). Nonetheless, 13% of respondents foresee rent increases in the next three months, particularly for office and industrial space, while retail rents are expected to fall. Investor demand was flat overall, with a decline in office investment but a rise for industrial and retail. Capital‑value expectations are mixed, with anticipated growth for industrial space but declines for office and retail.

Survey contributors highlighted challenges such as limited Grade A floorspace, funding and planning delays, but noted high‑quality enquiries in Cardiff’s office market and ongoing industrial developments in Newport.