EPMR: Economic & Property Market Review, Q3 2012
The economic backdrop remains challenging for occupiers, but there are some positive trends for occupational demand. The recent robust numbers for employment growth and some mildly encouraging retail sales figures are good examples.
Retail sales volumes were up 1.4% over the three months to June compared with the same three months of 2011. But non-store sales grew by a much stronger 11.8%, highlighting the challenge store-based retailers face to retain market share.
The sharp fall in overall UK construction activity in Q2 highlights the weakness of the development sector, and the level of new construction orders for commercial property remains historically low. Although very little development is coming on stream outside of central London, subdued occupier demand means that vacancy rates are still rising across many UK markets.
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