October 10, 2013
Will the property market experience an Indian summer? With reports from the major mortgage lenders and main industry bodies all suggesting an improving sentiment from owners and occupiers and a steady increase in loan applications is this the start of a potential recovery?
Within Shrewsbury we can report a steady increase in terms of office enquiries and terms agreed, with many parties undertaking thorough research of the marketplace before any decisions are made. Interest levels appear to have dipped slightly compared to last year in which the Shropshire market went against the grain of the main business centres in the UK where the amount of space let dropped visibly. With tenants becoming more ‘space efficient’ in their layout plans, with increased use of hot desking and also seeking to renegotiate terms with existing landlords and avoiding expensive relocation costs it remains a challenging time for some landlords, a decent barometer of any recovery will be when construction works for the planned second phase of the Shrewsbury Business Park commence.
An area of increased activity is within the industrial sector, were there is a notable shortage of stock, certainly within Shrewsbury. We have agreed terms on a number of industrial premises recently with a property in Harlescott going ‘under offer’ within 1 week of the instruction, we are also placing properties where Tenants have served notice to vacate in early 2014 to parties that have missed out on other premises that are ‘on the market’.
Another area of positive activity continues in the retail sector, with Shrewsbury Town Centre continuing to attract tenants from independents through to multiple retailers. It also appears that the north/south county divide has lessened, as we have concluded lettings in various Northern market Towns which have see limited activity over recent years. Although the recent demise of a number of retailers has occurred and it will be interesting to see how quickly these units are filled compared to that of the Woolworths premises and whether the charity/discount stores appetite continues. It also seems that the old price per sqft basis is being replaced by rent bracketing with certain streets/areas of Town Centres having a ceiling level which prospective tenants will not consider exceeding. We have recently agreed terms in Shrewsbury with the popular Italian restaurant chain ‘Carluccio’s’ for a premises on the The Square and this has increased interest in other premises we are marketing close by.
TSR received instructions to market the next phase of Vanguard Trade Park in Shrewsbury earlier this year through developers Morris Property and can report an excellent level of activity in this fifth phase with units available from 2,500 sqft upwards on either leasehold or a long leasehold basis with design and build opportunities also available. We have recently concluded deals of 5,000 sqft to Shukers for their Subaru and Isuzu dealerships and 10,000 sqft to Euro Car Parts with a further unit of 3,400 sqft ‘under offer’ leaving only 1 unit remaining out of the 9 constructed. This seems to reemphasise that there are pockets of activity within the market that has become very location and sector specific.
We have received a number of instructions to market a variety of development sites from half an acre upwards and it is encouraging to note that there is a clear return to the marketplace from small to medium sized developers and the Local Housing Association’s, who are using more creative scheme’s to provide new developments and allow these to ‘stack up’ in these uncertain economic times where finance is still tricky to obtain. TSR have been involved in one of the larger land sales in many years in Shrewsbury, having concluded a deal to Taylor Wimpey for 23 acres of prime residential development land off Oteley road, being close to the Shrewsbury Town Football ground and opposite the planned new Waitrose supermarket and Percy Throwers Garden Centre development. We have also been instructed to market Loppington House near to Wem, providing approx 7 acres with a mix of existing residential premises.
Although it does appear that the year has continued in an even more trying fashion, there are reasons to be positive and optimistic, as the demise of one chain leads to opportunities for another and we are finding that over the last few years it is more imperative than ever to instruct an agent that not only knows the local market but one that cannot just put together a deal in these austere times but one that can get it across the line, as that is the real test at the moment!
By Iain Mills BSc (Hons)