Thursday, 13 September 2007 13:47

Mixed outlook for rural office rents

Written by  Ruralcity Media
ImageCommercial property rentals in the countryside are showing increasing returns – but average office rents fell 2.4% last year to just over £8 per sq ft.
The average total return on rural let commercial assets in 2006 was 16.5% according to a recent report published by Savills Rural Research – an increase of 2.7% on the previous year’s performance.

The draw of the countryside as a location for commercial space is growing.  Last year, the number of urban tenants who relocated to the countryside represented 60% of the survey, said Ian Bailey, head of Savills Rural Research.

“The benefits of ample parking, ease of access and the appeal of the general environment play a part.  However, rents will need to be competitively pitched, especially where supply is increasing.”

Although average office rents fell, they strengthened by 3.4% in areas of high property value with up to £13.50 per sq ft achieved. A weakening was also recorded for retail units where rental averages declined by 8.4% to £6.21 per sq ft. 

But industrial units reflected a very different performance with a growth of 10.5% recorded during 2006 to average £3.51 per sq ft.

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