In locations throughout the UK, commercial agents are reporting rising demand as the economy improves and business confidence rises. This has led to agents in a number of regional areas voicing concerns over a lack of supply following years of almost zero commercial development.
In Coventry and Warwickshire, this issue is becoming critical as agents have witnessed a huge leap in demand across all commercial sectors such as retail, office and industrial.
Property agent ehB Commercial alone has been involved in a number of larger commercial deals in the Leamington area, with director Simon Hain expressing concern that there may soon come a time when agents are no longer able to facilitate such deals due to the dwindling supply.
He says; “We have seen an organic and sustained growth in interest in commercial premises in the Leamington area, which is always a good sign of recovery – but it is too early to pop any champagne bottles yet.
“We could soon see a situation where demand outstrips supply as stocks of such properties are dwindling and there is too little to choose from.”
In the past few weeks, ehB Commercial has facilitated a number of high profile sales including that of an 18,200 square foot office to Midcounties Co-operative, which is now seeking to further expand the property located on Tachbrook Park.
Additionally, 13 of the 14 start-up business units on the new Trident Park development have already been successfully let with deposits paid in full – despite the fact that construction is yet to be completed.
Now that economic recovery is in full swing, owners of commercial properties have become reluctant to sell as rental values continue to increase. This has put landlords in the fortuitous position of being able to charge more for rent with little fear that they will not be able to find a tenant – an issue which will be further compounded as supply lessens further and businesses are forced to take whatever they can get.
Of course, this will prove to be a particular issue for small businesses and start-ups, many of whom will not have the capital to afford high rents.
“In recent years it has been a buyers’ market with office values, for example, falling below the actual building costs: businesses have been offering substantially less than the asking price and negotiating significant reductions on rent,” Mr Hain continues.
“This has led to many landlords being reluctant to let or sell as they wait for the market to pick up.
“Well that time has arrived, or at least we are in the early stages of a recovery – the market is definitely thawing.”
With stalled construction projects now underway in locations such as London and Manchester, it seems that Coventry and Warwickshire must follow suit, or risk being left behind as the market heats up.
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