With the improving economy both nationally and locally the demand for commercial premises in and around Newport is beginning to increase markedly says Haydn Thomas, Director, Hutchings & Thomas Chartered Surveyors, Newport.
Enquiries for industrial and office premises, especially freeholds, across most ranges, are increasing and it is noticeable that the supply of quality stock in most areas is struggling to satisfy this demand.
With regard to the office sector we are finding that there is a growth in demand from private companies looking to purchase modern freehold office premises in and around the City and the supply of premises of this nature is almost zero.
We have recently been discussing requirements with a number of local businesses who are looking to expand or just move from leasehold accommodation, with their search area being the M4 corridor from Junction 23 to 28 and north to Cwmbran. While they are finding that a supply of secondary stock is available, that of quality modern office accommodation both to lease and purchase is few and far between.
Unfortunately this is leading those companies to search outside the area, which would be to the detriment of Newport and its hinterland with both the loss of such businesses and employment that is potentially created.
With regard to the industrial sector we are finding manufacturing demand increasing markedly especially demand for units with craneage. Unfortunately, due to the down turn in the manufacturing sector over the past 20 years, units of this nature are again at a premium with landlords, in some instances, now looking to reinstate cranes when a pre-let can be agreed.
Apart from this specialist requirement supply of general good quality warehouse production space is also at a premium with demand increasing for units of up to 10,000 sq ft. The supply of this nature is sadly lacking.
It is concerning that although, regionally, we are at an early stage of economic recovery we are already experiencing issues with being able to accommodate increased demand in both sectors while new development of such space is almost non existent.
We are currently dealing with developers looking to invest in Newport and they are concerned with the lack of assistance they are receiving from Government bodies to enable them to develop out units for which they have demand. This is linked to the on going issues with bank funding which is also stifling potential speculative development.
The issue, as we see it, is that the demand we are currently experiencing for business space will create inflationary pressures on the existing stock and without development to the levels required companies may look to relocate to other areas or their business strategy may be affected to the detriment of their operation.
We are aware of certain funding from both local authority and the Welsh Assembly however we feel there should be a more focused approach to development funding to encourage development across the sector. Maybe it is time to also look at the planning system to speed up the amount of supply coming on stream. It also raises the question as to whether the Welsh government should hark back to the Welsh Development Agency days and be looking to develop themselves in certain areas.
Although the issues faced by the commercial sector are no where near that of the residential supply/demand issues the consequences of the lack of commercial space could have serious consequences for the local economy.