Commercial Property enquiries are on the rise and, more importantly, a larger proportion of them are being converted into leasehold and freehold transactions than was the case 12-18 months ago.
A recent survey by the Royal Institution of Chartered Surveyors (RICS) found that tenant demand for commercial property in the UK rose at an unprecedented rate in the first three months of this year. The number of surveyors reporting an increase in demand for space was 52% higher than those reporting a fall. The rise marked six solid quarters of growth in demand, with the upswing particularly marked for offices and industrial real estate.
The strong demand has inevitably driven up rent expectations. The RICS study said office rents are expected to grow by 4.5% and capital values by 5%, while in the industrial sector the mood is even more buoyant, with rents and capital values predicted to rise by 5.5% and 6% respectively.
Although the second-quarter figures have not been published yet, there is evidence to suggest that these positive trends have continued – especially in the North East.
Bradley Hall, which has more than 25 years’ experience of the local commercial property market, has seen a significant jump in instructions in the first six months of 2014 – a sign of growing confidence in the market. During this period we have completed on several commercial property deals, including:
The seven-figure purchase of the former Kerry Foods factory near Durham Retail Park on behalf of serial entrepreneur Andrew Ward.
The new retail premises for Capology, the fast-growing retail venture spearheaded by the grandsons of Newcastle United legend Sir John Hall.
The letting of 1 Benton Terrace, an unusual property with eight self-contained mid-nineteenth century offices, to local health and fitness firm Fitness Matrix.
The purchase of a three-storey building in Low Fell on behalf of TW Construction, which is run by entrepreneur Tony Whelan.
The £20m refinancing of Durham-based 3R Land and Property – a move which has enabled the company to pursue significant development opportunities across the North East.
The letting of the former Tetley Tea distribution warehouse in Newton Aycliffe to Tekmar, the multi-million pound offshore renewables company.
The acquisition of the Lloyds TSB building in Alnwick on behalf of private investors.
The acquisition of two industrial units on Lionheart Industrial Estate, Alnwick on behalf of private investors.
In the first six months of the year Bradley Hall has completed on deals for several clients including Albemarle and Bond, Northumberland Estate, Arch Northumberland and Barclays Bank. We have also formed an alliance with one’s of the world’s strongest and most respected banks, Handelsbanken, which has enabled us to assist the Swedish-owned company with property valuations across the North East of England.
This flurry of activity in 2014 has enabled us to bolster our senior management team with the appointments of associate directors Richard Rafique and Amanda Burbridge. Richard, who graduated from Northumbria University with a BSc (Hons) in Estate Management, has a successful background in the commercial property sector having worked for key companies and estates across the region. Amanda, meanwhile, has joined Bradley Hall’s busy Gosforth office as a valuer having previously worked at Sanderson Weatherall.
All in all, 2014 has been a year of success for Bradley Hall, the regional commercial property sector and the wider North East economy. Access to finance has improved and more favourable mortgage lending terms have attracted a new wave of buy-to-let investors to the market. I see no reason why these positive trends should not continue for the foreseeable future.