An upbeat first quarter and after a handful of successful sales and lettings the commercial and land stock of availability has started to dwindle. With an increasing market confidence we have on a couple of occasions had “final and best” bidding where we have more than one party interested in property, especially on the freehold properties within Stourbridge, Kidderminster and North Worcestershire. Values in the right circumstances are also hardening and showing some signs of improvement, this is particularly within the office, industrial and investment markets.
Is this a reaction to the recent change in stamp duty charging for residential “but to lets” with the new 3% surcharge….? to early to say but clear signs of increased activity with banks lending and the available capital through SIPs, pensions etc. leading to more availability for cash and a reducing number of opportunities to put it in.
Three month on from the opening of our Kidderminster office has found us busy on all fronts, the residential sales instruction are coming in thick and fast and sales the same way. Commercial enquiries are up with the icing on the cake, the recent grant of full planning consent on the new 400 berth Marina, Marina Quays, at Stourport together with 84 holiday apartments, new club house, commercial and retail space and enhancement of public open space this signals the start of a very significant investment in the future of the town and creation of new tourism and business jobs
Occupier demand within offices and industrial has been strong for the last 6 months placing further pressure on the supply. Both rents and capital values have increased accordingly to reflect the imbalance. The outlook for the rest of 2016 is generally positive with the prospect of further speculative development to help alleviate the supply chain pressures which looks set to be met with continued occupational demand. There does however continue to be an underlying air of uncertainty over global stability and its effects on trade and, in particular, manufacturing and this may have an impact on some areas of the occupational side of the market through the coming year.
Occupier demand for commercial real estate had risen, particularly for warehousing and distribution facilities. There were, however, some reports of easing investment demand from the Middle East and China.
Housing market activity had remained subdued relative to pre-crisis levels, reflecting a lack of properties for sale. Many fellow estate agents reported a persistent weakness in the pipeline for transactions.
The recent RICS UK Commercial Property Market Survey shows a continued rise in occupier and investment demand, albeit the latest results signal a slight softening in the rate of increase. Nevertheless, with supply failing to keep pace with demand right across the UK, capital values and rents remain firmly underpinned.
In the occupier market, demand for leasable space continued to rise across all sectors, as it has done in each quarter since the early part of 2013. According to survey feedback, momentum is greatest in the industrial sector at present, although tenant demand growth remains solid in both the office and retail areas of the market. At the same time, available space continues to fall significantly with the RICS supply indicator for the occupier market signalling an eleventh consecutive quarter of contraction.
Consequently, capital values are anticipated to rise further in each area of the market over the near term and to continue to increase during the next twelve months. Within this, prime office and industrial sector values are projected to chalk up the most sizeable gains. At the regional level, price expectations sit comfortably in positive territory across all parts of the UK. Interestingly, although still firm, respondents in central London scaled back their expectations for capital value growth notably over the quarter.
So all in all a positive month and time to consider you property assets – arrange a free commercial property appraisal and assess your options and Developers dust off the old plans and look at new development in the office and industrial sector….. the time at last seems to be right.