Like London Clancy, regional commercial property agents, anybody with an eye on general business activity will already know that retail is having a tough time. The impact of this is also having a marked effect on landlords and investors in this arena.
London Clancy want to examine this question in a bit more detail and lift the lid on some of the issues. So, we ask, what is the current economic temperature of the British High Street? Is the British High Street a battleground?
London Clancy, regional commercial property agents have just appointed Sarah Bruce MRICS MSc BSc Hons to join their Management and Professional team. Read more >
London Clancy, the regional property agents appoint new staff. As commercial M3 and Solent Corridor property consultants, London Clancy are expanding their services. Two new faces join the team with Mark Everett ABIFM and Sarah Bruce MRICS MSc BSc Hons. Read more >
Green Snow Ltd have signed a 10 year full repairing and insuring lease on the new industrial development at Mortimer’s Industrial Estate at Ower near Paulton’s Park.
The complex originally comprised of three new individual units which were re-configured to Green Snow’s exact requirement to provide a high quality detached building with two storey offices and warehouse facility providing a total of 6,336 sq ft.
London Clancy acted on behalf of private landlords.
2019 will be a year of potential contrasts for the M3/M27 property markets as investors and occupiers react to the unfolding Brexit scenario and as set against the robust activity within the region over the last twelve months.
A cautious and slow start to the year is expected but that could accelerate into an exciting second half.
Clearly the outlook is uncertain, but that has been the position since 2016 and to-date there has been little direct impact of the current political situation on the commercial property market in our region.
It is anticipated that the underlying market fundamentals and trends will continue unaffected during 2019. These include ongoing strong investor and occupier demand for industrial and warehousing space and in particular Grade A accommodation, and therefore schemes such as ITT/St. Modwen’s Junction 6 & 7 M3, 200,000 sq ft warehouse and business space development in Basingstoke. Secondly there is sustained confidence in the South Central region supporting long term investment and as illustrated by Tellon Capital’s redevelopment of the Bargate Quarter in Southampton and £60 million purchase and redevelopment of the Chineham Shopping Centre in Basingstoke and numerous substantial acquisitions over the last twelve months, including Eastleigh Works being sold for £20.6 million and Palmer Capital and RLAM acquiring out-of-town retail investments at Hedge End and Farnborough respectively for figures in the region of £40 million.
Further trends include increasing demand for flexible co-working and serviced office accommodation and an ongoing shortage of Grade A industrial and office space continuing to apply upward pressure to rental levels.
Total returns are likely to be driven by income rather than capital in 2019 as yields flatten, and depending on the Brexit outcome, potentially increasing from the historically low levels achieved last year. Investors and occupiers will probably take stock during the first quarter of 2019 but will soon be under pressure to allocate available funds and progress longer term investment plans.
In 2019 the industrial and warehouse sector will continue to be the “engine room” of the commercial property market in our region with occupier take-up likely to once more exceed 1,500,000 sq ft and a mixture of institutional, overseas and Local Authority investors continuing to actively seek opportunities in this sector. Short term storage will be at a premium. Rents will increase from the current levels of £11 per sq ft for Grade A space in the upper M3 corridor and from £9.50 per sq ft in Southampton.
The office market may be more subdued with rents remaining at headline figures in the region of £21 per sq ft in Southampton, £24 per sq ft in Basingstoke and £27 per sq ft in the Blackwater Valley.
The retail property sector in our region is facing another difficult year in terms of the performance and stability of the large retail chains and the ongoing background of fierce competition from online operations. Secondary and tertiary retail locations will continue to try to attract independent retailers mixed with food and beverage operators with a view to improving the vibrancy and economic dynamic of our High Streets. Rental levels in most of our Centres have been adjusted to the post-recession circumstances and there is unlikely to be any significant movement during 2019.
In summary, 2019 will be a year when the property market in the M3/M27 region will need to ride the uncertainty of the political backdrop, but with the confidence of a marketplace that has shown sustained growth and prosperity over the years and one that is well placed to take full advantage of any economic bounce-back once the Brexit course is known. In other words, for now, it is very much business as usual.