With only 3 weeks to go before the much anticipated and uncertain general election for a generation the market seems to be sluggish with decision making delayed or postponed until the result of the election is known.
Although sales of commercial property are up over the last few months we have successfully now sold the second and last of the former doctor surgeries in Worcester Street, with the larger of the two now being refurbished as a serviced office centre, good news for smaller and new businesses looking for a flexible and serviced office environment.
The investment market is also proving more sustainable we have now put under offer a major multimillion pound investment portfolio to a local commercial property investor, showing good signs that property investment still remains a relatively safe and high yielding investment especially mixed commercial, retail and residential as with this portfolio in Kidderminster.
Office letting activity has also improved with the last units now under offer at Hagley Hall, with all the units in both Hagley Mews and The Old Woodyard shortly to be fully occupied, a situation that has not existed for many year. In fact Hagley has a dearth of office suites with only two units available as far as we know in the village. N E Downing, the Funeral Directors, have recently relocated their business to larger premises in Worcester Road Hagley village and we are now letting their previous building at 149a Worcester Road a two storey self-contained office and retail property where we have very significant interest and many viewings so expect to have this under offer very shortly. In fact in Worcester Road Hagley Village there are no vacant retail units at all with a new Indian Restaurant expected to open shortly in the former butchers close to the Spar Supermarket.
Significantly a number of the shops in the village have undergone total refurbishment signs of the renewed confidence in the retail market in the village no doubt on the back of considerable housing development which is now successfully selling, bringing new families into the area from the Birmingham Conurbation and no doubt this will also lead to new and relocating businesses looking at our area as a good alternative to the more expensive and congested city locations close to us.
We have also seen some interesting news this week that we have just gone into a deflation period with the main inflation rate just below zero and the published intent of The Bank of England to hold interest rates at the low level as they have been for some time. Any increase appears to be put off until next year. This would normally instill more confidence in the market but deflation has potentially bad side effects to economic stability and with the uncertainty in the result to come from the General Election business and investment decisions are being treated with a degree of caution.
High lights from the Bank of England’s recently published summary of business conditions show consumer demand had continued to grow steadily, signs of a pickup in housing market activity since the start of the year and investment intentions for the next twelve months were consistent with moderate growth overall. Business services and manufacturing turnover growth had remained robust and broadly based. Manufacturing output growth for the domestic market had edged lower with manufacturing export growth picking up. Construction output growth had continued robust overall with corporate credit availability continuing to improve and finally employment intentions were consistent with modest growth overall.
Summarising the state of the commercial property market across our area industrial shortage is here, but is closer to being redressed through development. Demand for freehold properties however seems to be growing with a shortage of suitable opportunities. Demand to purchase industrial/warehouse units continues to outstrip supply. Slight improvement in demand to buy office space, but demand to rent secondary space is presently moribund, although Incentives have continued to reduce.
So role on May and let’s get back to positive growth and confidence again.