After a sluggish end to the year, the commercial property market in the South West is showing pre-pandemic levels of activity, according to property consultants Vickery Holman. With commercial agents covering Cornwall, Devon, Bristol, Somerset and Dorset, the view is that momentum has been building since January 2023 across all sectors of the market.
‘While the greatest activity is still around the seemingly invincible industrial sector, we’re seeing the office sector start to revive and ironically, the postal strikes have actually been a boon to the beleaguered High Street, with shoppers preferring to visit shops rather than risk parcels not appearing.’ Comments Joanne High, Head of Commercial Agency at Vickery Holman. ‘Our stock levels are looking healthier than they been since March 2020, and we’re achieving record office rental values in Plymouth, which is a very encouraging sign. However, this is with the caveat that the highest rental values are going to new office builds with quality fitouts and excellent ESG credentials.’
In the industrial sector, demand remains strong for all sizes of units, but especially for smaller units sub 2,000 sq ft and for larger units in excess of 10,000 sq ft which are in short supply. Vickery Holman have just brought a 65,000 sq ft unit to the market at Langage in Plymouth which is the only unit of that size available in the area. Further east, a 16,000 sq ft warehouse at Patchway Industrial Estate in Bristol has just become available to let and is generating high levels of enquiries.
Jo High added ‘Given the increase in build costs which has pushed up the prices of new build units, as well as the lack of supply of good quality units, it’s not that surprising that we have seen some stiff competition for second hand stock when it comes available. Freehold remains attractive too, with investors still keen to snap up potential bargains.’
In spite of the feeling in 2020 and 2021 that the office sector might not recover from the move to hybrid working, the office sector remains active, with considerable interest in high quality, well-located offices with EPC A ratings.
‘At our Spring Market Update, we ran a survey on office versus home working, and over 60% were predominately working out of the office. This trend back to the office is likely to continue, which will put pressure on employers to provide attractive well equipped office environments, and pressure on landlords to upgrade their office buildings to attract higher rental values. We’re very short on available high quality office buildings in central Exeter, but we’re seeing excellent rental values being achieved in Plymouth’. added Zach Maiden, Head of Exeter Office. ‘To be honest, factor in the shortage of skilled employees, and employers are looking down the barrel of a gun to invest in their working environments, as well as assess their employer branding and benefits to entice people into the office.’
In Cornwall, the office market is still recovering, with an increase in activity and transactions across the county. Within the local area of Redruth, Pool and Camborne we have seen greater demand for offices of sub 1,000 sq ft. We see a diverse mix of enquires looking to use the office space for a mix of uses including as training space, teaching space and traditional office users with the key demand being flexibility, such as the space on offer at Chi Tevyans.
Vickery Holman is bringing several retail units into the market, and finding interest is more active than in 2022. The postal strikes did bricks and mortar retailers a favour in that it made people come back to the High Streets to shop, while “shop local” remains popular. With sustainability in mind, people want to buy goods with good eco credentials from local suppliers. With business rates having reduced substantially for most shops, this is also helping with reducing overheads and making shops a more viable prospect for businesses.