The retail sector drives the most commercial rental demand

A recent analysis of the current commercial rental market reveals which sectors are currently most in demand when it comes to the requirement for rental premises.

Revolution Brokers reveal how demand differs on a regional basis by looking at the percentage of listings that had already been let across the five primary sectors.

Like most sectors, retail has been subject to numerous challenges during the coronavirus pandemic. Yet with 26% of all commercial retail units already let or with a let agreed on them, commercial retail rental properties are currently the most in demand.

Commercial rental demand across England

Across London where 39% of all retail rental properties have been purchased while 30% have been snapped up in the East of England and 31% in the South East.

The consumption of goods online has drastically increased since the Covid-19 pandemic, prompting demand for industrial and warehouse space. Leisure and retail rental spaces are the most popular amongst East of England and South West.

Rental demand for commercial land is strong as 21% has been purchased for development purposes with London snapping up the highest percentage of plots (41%).

Given that working from home has become the norm for most companies it shouldn’t come as a surprise that the rental demand for office premises sits at just 7%. 

According to Revolution Brokers’ findings, commercial office space is mostly sought in the East of England (17%), West Midlands (10%), and the South West.

Founding director of Revolution Brokers, Almas Uddin, commented: “When investing in any rental property there are a myriad of factors to consider from the initial investment cost, the rental income available, the length of void periods and the general demand for such properties. 

"The latter is particularly important and these considerations are no different when investing in commercial property." 

"What type of investment to make and where to make it can make a significant difference. For example, while office spaces have traditionally been a safe bet due to high demand and tenant longevity, the post-pandemic landscape is now very different.”