A shortage of offices and industrial units in Worcestershire is putting upwards pressure on prices as demand for commercial property remains strong, according to one of the county’s leading commercial property agents.
John Dillon, partner at commercial property consultancy GJS Dillon LLP, which has offices in Worcester and Bromsgrove, says that lack of available stock, particularly of freehold properties, makes it the best time since the credit crunch for landlords and owner occupiers of offices and industrial and warehouse units to sell.
He says: “We have got clients on our books waiting for space to become free across all of the county from Bromsgrove, Droitwich and Redditch in the north of the county down to Malvern and Worcester, and little quality stock for them to acquire.”
According to CoStar, at just over 2.1 million sq ft, there is less than nine months available stock of freehold industrial units remaining in the county. The average annual take up for the past two years has exceeded 3.4 million sq ft. With 3.3 million sq ft of available stock, the situation for leasehold stock is somewhat better, with two years supply still available.
Around 18 months supply of freehold offices, at 292,000 sq ft, remains available. The average annual take up for the past two years is just over 200,000 sq ft. Around three years supply remains of leasehold offices.
According to Mr Dillon, the recent changes to the SIPPs rules have made smaller freehold properties more attractive, as many company directors seek to purchase a property for their business through their pension schemes.
He says: “Add the SIPPs changes to the continuing low interest rates and the increasing willingness of the banks to lend, and you can see why freehold properties are sought after.”
Mr Dillon continues: “There is particularly high demand for smaller office units, and industrial and warehouse units, and the quality of some available stock is not the best, which means that any properties approaching grade A are selling quickly.”
GJS Dillon has disposed of four industrial units in Bromsgrove in the past month, which all sold within three weeks of coming on to the market.
Mr Dillon says: “These grade A units of various sizes from 4,000 sq ft to 10,000 sq ft were highly sought after by a range of prospective buyers and achieved optimum prices.
“However for any landlords or owner occupiers thinking of selling, our in-house building surveyor can advise on how to bring their properties up to standard to maximise the value for a sale.”
Leasehold industrial units also remain sought after in the county, with businesses attracted by Worcestershire’s excellent communications, through easy access to the M5, M42, and M40, and to Birmingham, London and international airports, its flexible workforce, significant industry clusters, key lifestyle factors, and useful assistance from the LEP, County Council and other public sector bodies.
Just last month (August 2015), GJS Dillon let a 14,869 sq ft warehouse at Unit 4, Wainwright Road, Worcester, to Divertimenti, one of London’s top kitchen and cookware shops and brands, which chose to relocate its distribution warehouse to the city from Leamington Spa, bringing a number of new jobs.