The RICS Commercial Market Survey for Q3 2017 revealed that occupier demand continued to increase in the industrial sector.

However, it was weak in the retail market and declined in the office properties.

The trend was reflected in rent expectations, which also remained strong in industrial properties, but were more subdued in the office and retail sectors.

The results were stronger in the investment market than in the occupier sector, but enquiries regarding investment increased across the board.

Across the UK, occupier demand in Q3 held steady at the headline level, with 5% more respondents experiencing an increase as sentiment picked up.

Focusing on individual sectors, demand has increased strongly for industrial space (net balance +28%) and stabilised in the office sector, having decreased in Q2.

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However, demand has continued to fall for the second consecutive quarter in the retail sector.

In terms of valuations – across the whole of the UK – a strong majority of respondents (65%) believe the market is fairly valued at present, which is unchanged from Q2.

Gail Hunter, director of RICS Scotland, said: “Scotland’s commercial sector was buoyed by the industrial market, which neglected a slump in office rentals and weakness in retail.

“This was mirrored in rent expectations, which were strongest in the industrial market, but levelled off elsewhere.

“A key issue for Scotland going forward will be how the market responds to the likely first interest rate rise in a decade [this] month.

“Given that expectations are only for a modest tightening in policy, the likelihood is that it will be able to weather the shift in the mood music.

“But this remains a potential challenge if rates go up more than is currently anticipated.”