In its latest economic update, the Bank of England has stated that the economic recovery in the UK has “finally taken hold” and is growing at a robust rate as uncertainty lifts and credit becomes easier to obtain.
The Bank points out that significant headwinds remain at home and abroad and there is a long way to go before the aftermath of the global financial crisis is overcome and economic conditions return to normal.
However, the upturn has had a marked impact on the South West commercial property market where values increased throughout 2013. Retail and offices were hit hardest by the recession and so are likely to see the largest corrections this year.
In the industrial market, this has already occurred with several multi-let estates. These types of properties are popular with larger local investors and have been attracting a number of property companies, especially those based in London.
Local agent Vickery Holman has been busy in this sector with the sale of Finnimore Industrial Centre in Ottery St. Mary and Anna Mill Business Park in South Devon.
Property companies are also interested in multi-let offices. In many cases, these are now showing double figure returns.
Vickery Holman also points out that efficiency will be a challenge for the office market going forward.
Most of the South West stock is currently well below standards, which is to be expected as the country moves toward a zero carbon economy. This situation creates a problem but also opportunities, and Vickery Holman building surveyors are already working with several clients on retro fitting existing office buildings.
Unsurprisingly, the retail market remains challenging although there are deals being done. The bottom end of the market is proving to be the busiest, with secondary and tertiary properties showing double figure returns.
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