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New Alder King report predicts rental growth and improved prospects of speculative development in 2013

wantspacegotspace.co.uk - Simon Price Alder KingThe supply of office and industrial space fell for the first time since 2008 in nearly every major South West centre last year, according to Alder King’s Market Monitor, an in-depth report into the region’s commercial property market.  

The shortage of readily available new, well-specified space will drive rental growth and make new development increasingly viable in 2013.

Simon Price, head of agency at Alder King, says: “A number of positive trends have emerged over the past year which will impact across the market in 2013, the most important being the now reducing supply across the region in both the office and industrial markets.

“Whilst there has been very limited speculative development across the region over the last three years, the market in a number of locations is reaching the point where viability is improving,” he says.

Offices
Last year saw an increase in the volume of completed office deals across the South West, although the majority were for small amounts of accommodation on flexible leasehold terms.  As a result, the level of supply fell in every centre across the region, with the exception of Exeter and Plymouth.  With very little new office development underway, there will be a reduction in incentive packages on offer and the prospects of limited speculative development are improving. 

Industrial
Take up in the industrial sector increased in all centres except Bristol, Gloucester, Swindon and Yeovil where a lack of good quality supply was a constraint to activity.  Encouragingly there are an improving number of requirements but some occupiers will only be able to satisfy their needs via the design and build route.

Retail
The retail sector continues to struggle but has been buoyed by strong demand from restaurant, coffee shop and convenience store operators looking for representation on the high street.  Out of town, foodstore operators remain the most active.  New development is sporadic but is generally anchored by a foodstore.   

Investment
The investment market remained fragile through 2012 and the value of transactions in the South West dropped to £500m, half the average annual figure of the last four years.  

Residential Development Land
The market was active in 2012 with slowly improving sales volumes and a shortage of good quality sites.  Demand for well-located, good quality sites for 50+ family housing is strongest in Bristol, Exeter and Cardiff.

Alder King’s Market Monitor 2013 provides a summary of the commercial property market in Bristol, Swindon, Gloucester, Bath, Taunton, Yeovil, Exeter, Plymouth and Truro.  It also covers Newport, Cardiff and Swansea in South Wales. 

The full report is available to download at www.alderking.com/publications.  

A mid-year update will be published in July 2013.

Posted by The Editor (wantspacegotspace) on 18th January 2013 (updated 21/01/2013)

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