Last year we were treated by the Lumix GM1, an interchangeable lens camera that, in many respects, was small enough and packed with all the goodies to be considered an alternative to a compact camera. One year on and the small-scale compact system camera is back for round two, this time in the shape of the Panasonic Lumix GM5, and Pocket-lint has been given the lowdown of this new model ahead of its official announcement at Photokina 2014.

The Panasonic Lumix GM5 doesn't out-and-out replace the original GM1, instead it's there to act as a more advanced model by incorporating a built-in electronic viewfinder and hotshoe for adding additional accessories - there's even a dinky flash included in the box to get you started (a stand-in for the absence of a built-in flash, as featured in the GM1).

If you're after high quality images in a small package then, and just like its predecessor, the Lumix GM5 has got your back. We've been using the camera and, given that it relies on many of the same feature pillars as the earlier GM1 model, you can expect results to be much the same. There's the same 16-megapixel Micro Four Thirds sensor on board as in the GM1, teamed up with the Venus Engine and some tweaks to see performance improvements.

Clearly Panasonic is keen to promote the GM5 to more than just the casual photographer as a 15mm Leica f/1.7 (which is a 30mm equivalent) kit option is available for £1049, a fair chunk of cash more than the £769 price of the 12-32mm (24-64mm equivalent) kit. Good to have the options there.

Despite squeezing a 1,166k-dot LCD electronic viewfinder into the build to the upper left corner of the rear, the GM5 is only marginally larger than the earlier GM1. The rear protrusion from the viewfinder adds 5.7mm to make up a 36mm depth, while the 98.5mm length remains the same and the height increases by 5.4mm to 59.5mm total to accommodate additional buttons. But it still feels small in the hand and in keeping with what the GM-series size is all about.

The addition of the viewfinder is great in this small form too. However, given the 0.46x (equivalent) magnification it's not the hugest of screens out there - but that's hardly a surprise. Eye Sensor AF has been included for quick viewfinder and autofocus activation, although there is still a minor delay for it to be ready. The finder's refresh rate operates at 60 frames per second, making for a decent preview and lag wasn't a significant burden from the quick tests we performed in a windowless interior meeting room (don't worry, the lights were on).

That's not the only refresh rate that's been upped either, as the rear screen benefits from a 240fps cycle which, in turn, benefits the autofocus system. In the GM1 the 120fps refresh meant 120 instances of possible capture in a given second, which is now doubled and, therefore, is more adept to quickly zipping into focus on a given subject. Panasonic claims 0.06-seconds (with the 14-140mm and 14-42mm lenses) but, frankly, it's so fast that anybody would struggle to notice. Put it this way: it's near instant to focus.

In addition the touchscreen - the display of which is 50 per cent brighter than the GM1's - is wonderfully responsive and this makes for a great way to quickly tap a subject for focus. This can be turned off, as it's all too easy to accidentally tap the screen and move the focus point without meaning to do so - an issue we discovered with the original GM1. But we'd rather have a touchscreen than not. There's no vari-angle ability this time around, but for the sake of keeping the body's scale to a minimum we think that's a wise decision.

That doubled refresh rate also benefits video capture. It's now possible to capture 1080p at 60fps maximum, whereas the GM1 only offered interlaced (1080i) capture at this level. A good boost to see, although it's not pushing into the 4K UHD capture territory that Panasonic is making great headway into (take a look at the Lumix GH4, for example). There are also full manual control options and the Creative Control options mean it's possible to record while using some in-camera special effects applied.

The Lumix GM5's design is ultimately similar to the earlier GM1, with some minor tweaks. Despite the obvious viewfinder and hotshoe, eagle-eyed readers may spot a shift in the visual appearance of the faux leather finish to the front. It's been toned down to be altogether more subtle and, we think, this makes for a more premium overall look. There's also a red colour model, but we only laid eyes on the black model at this stage in time.

In addition the focus settings dial on top of the camera, which can be used to switch between single, continuous and manual focus, loses its centralised function button to become a dedicated dial. The function buttons now reside on the rear, above the LCD screen, alongside a dedicated rear thumbwheel instead of the rotating d-pad of the GM1. This makes a lot of sense, as the small scale of the buttons made using the GM1 a little fiddly, something avoided by separating where they are placed. But it does come at the expense of those extra few millimetres of height in the build.

If there's one thing that doesn't look to be improved it's the battery life. Even though we only saw the camera for a short period of time, we saw a two-thirds full battery drop a full bar in little time. The addition of an electronic viewfinder along with the rear LCD will act as a persistent power drain. When we get the camera in for final review we'll see how well - or poorly - it lasts per charge.

But other than that potential blip the Panasonic GM5 irons out almost all criticisms and wants we had with the earlier GM1. Better video capture, a hotshoe, built-in viewfinder and better looking design. It's a touch pricier, granted, but given everything that's on board that's understandable. 

In addition to the new camera, there will be a newly fashioned 14mm f/2.5 lens (cosmetic changes only, priced £349), alongside a brand new 35-100mm (priced £319) that's positively tiny considering its 70-200mm equivalent range.

Lots of positive things to say about the Panasonic Lumix GM5. If that battery life lasts better than our gut feeling tells us then this dinky interchangeable lens camera will certainly be one to watch when it arrives in stores this November.