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Businesses looking to expand in the West Midlands

Businesses across the West Midlands are slowly looking to expand by taking on more premises in which to house their operations, according to the latest quarterly RICS (Royal Institution of Chartered Surveyors) commercial property survey.

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Interest from would-be tenants of shops and offices remained healthy while demand for factories saw a rise during the run up to summer, with 29 percent more surveyors in the region reporting increased interest for industrial units.

While the lion's share of national growth was seen in London, most areas of the country saw something of an uplift. Although activity is still subdued at a headline level, the results of the latest RICS report are consistent with the signs of recovery that has been visible in much other recent economic news flow.

In tandem with rising demand, the amount of available retail and industrial units dipped slightly. However a net balance of 13% more surveyors in the West Midlands reported an increase in available offices across the region.

Since the end of 2007, predictions for the amount of rent business premises will generate have been in the doldrums but surveyors in the West Midlands say rents are falling at a slower pace than previously, so this could be a further sign that a corner is slowly being turned.

Significantly, it would also seem that the amount of newly built commercial premises is beginning to stabilise. As with rental values, the downturn saw construction levels drop considerably yet no notable falls have been evident for some time – the amount of office space and retail property built last quarter (April-June) even rose.

Graham Jones, of Kingston Commercial Property Consultants in Lichfield, said: "There are signs that the market is gradually improving, particularly within the industrial sector. But there is potentially a shortage developing of good quality modern properties of certain sizes in specific locations which could lead to a possible rise in values or more likely a reduction in leasehold incentives."

RICS chief economist Simon Rubinsohn added: "It has been well publicised that the commercial property sector across much of the country has been struggling since the onset of the credit crunch. London has been something of an exception but at long last, there are some green shoots beginning to sprout in other parts of the UK. It is still early days and the rental outlook looks challenging both in some localities and some sub-sectors. However, the generally better numbers on tenant demand are an encouraging pointer to the future."

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