COMMERCIAL PROPERTY ON THE MOVE

The commercial property market performs differently to the residential market: recent reports from a variety of sources suggest that residential prices are falling due to more properties being offered to the market.  The opposite is true in the commercial property market, where there has been a significant upswing of demand in certain sectors.  This turnaround in the commercial market has followed a sustained period of weak demand and is long overdue.
The malaise in the commercial property market started with the financial crisis in 2008 and has seen town centre retail vacancy rates in most of the North Northamptonshire towns in the range of 13-17%; office rents had fallen by as much as 30% and industrial property by between 30-50%.  At the start of 2010 the property market were anticipating an upswing in demand, however, this did not happen in the run up to the General Election.  Previous election results have, traditionally, prompted a mini boom but, again, this did not occur due to the uncertainties of the formation of a coalition government.  However, in a diverse and dynamic economy, inertia cannot be sustained and, indeed, the start of the second half of the year has brought about a dramatic turnaround in demand.  The consequence of which is that there is now a shortage of certain types of commercial property throughout the North Northamptonshire region.
At Barnes Noble Edwards we have seen six properties on High Street and Gold Street, Kettering being placed under offer.  There is a similar picture when it comes to industrial property in Kettering where Barnes Noble Edwards report that they have let all but five small units in the town.  Again, the picture is similar in Wellingborough where there has been an unprecedented increase in the number of enquiries for units of up to 10,000ft² on Finedon Road Industrial Estate and also in Corby, where the number of instructions coming to the market is slowing and with demand increasing gradually.
The upswing in demand has occurred in the run up to the Comprehensive Spending Review, details of which have just been announced.  Time will tell what affect this has on commercial property demand, although it is believed at Barnes Noble Edwards that business confidence is returning regardless of government spending policies.  This, in part, is due to occupiers realising that the bottom of the market has been reached and  that property prices are now increasing.  In addition, businesses cannot afford to put off property decisions indefinitely.
Andy Griffiths of Barnes Noble Edwards says “We are seeing a chronic shortage of stock for certain types and sizes of industrial property throughout the region.  Likewise, prospective tenants for retail properties need to make a move quickly if they wish to secure the properties that they want.  The office market remains slower than either retail or industrial but there is a very small amount of Grade A accommodation available in the region.  It is expected that this over-supply will be eroded relatively quickly over the next eighteen months”.
For further information on the commercial property market in North Northamptonshire contact Andy Griffiths on 01536 517777 or email ag@bne.co.uk