Propertymark says its Commercial agency members continue to witness a re-imagining of the sector to combat online retailers and the after effects of the pandemic.

Many town centres are starting to embark on a phase of revitalisation that brings a new focus for many communities, transforming space that was traditionally wholly retail focused into areas that provide a sensible balance of business space, leisure, entertainment, education, and health-related facilities that better suit future demand.

There has been a positive uplift in rental sentiment for smaller businesses such as the takeaways sector. However, sentiment in the leisure sector has shifted to negative and agents remain concerned about rents for large-scale office space, pubs and restaurants.

There are future challenges to consider within the sector, as uncertainty persists about future government legislation, other factors include high building costs and rates liabilities being highlighted as key concerns within the medium to long term.

Michael Sears of Propertymark’s commercial advisory panel comments: “The commercial property sector remains challenging, as we continue to transition away from traditional retail-based models and witness the ongoing impact of online shopping across the retail landscape. 

“In addition, we have seen a defined shift away from demand on large-scale office space, with many businesses striking a new balance offering long-term and permanent homeworking alternatives.

“As aspects evolve, they provide deep insight into how the commercial property sector must focus for the future. The after-effects of the pandemic continue to reformat many conventional ways of thinking about how the industry has invested over the years.

“However, we do sit at the start of an exciting phase where many town and city centres are looking at large-scale redevelopment ensuring they are fit for purpose for future generations to come. Within this process there are exciting opportunities to ensure a healthy mix of property types which ensures communities have a defined offering that coexists and complements the growth of online retailing and the evolution of homeworking.”

Some 33% of members forecast a demand increase in the Land and Yards sector; 47% of members forecast a demand decrease in the office sector; and 50%of members report rents rising following reviews.

The detailed full report is here.