Around the Midlands

Nottinghamshire
By Paul Giles Associate Director Savills Nottingham
Despite being in the midst of what has been billed the worst recession in decades, there are still plenty of deals being done here in Nottinghamshire, and as usual we are seeing a sudden flurry of activity before the year end. However, as market conditions remain fragile and with the banks being more selective when it comes to lending, there has been an obvious and significant shift from both buyers and sellers alike in using Public Auctions rather than the traditional Private Treaty method of sale. As we all know, wider economic factors can quickly shift the markets view on risk and ultimately pricing, often resulting in a gulf between the expectations of both the buyer and seller. Such quick movements in the market can cause Private Treaty deals to falter at short notice with buyers ÔchippingÕ the deal as the market moves against them and the increasing difficulties in obtaining bank funding. The speed at which an auction sale can take place (often within a matter of weeks) at least gives some certainty to the seller and with the competitive nature of the bidding will more often than not result in a higher price being achieved compared to the Private Treaty method. My own opinion is that the auction rooms are a good barometer of market conditions and buyers expectations on pricing. Attendance levels at our own auctions has increased to record levels over the past 12 months and have become the social gathering place for the regions property investors and speculators. With bank returns at an all time low, there is an insatiable appetite for investment in bricks and mortar, particularly for properties with capital values of less than £250,000. The trend towards using auctions as a method of sale can be seen with the different types of property being offered including modern office buildings, industrial units, shops and land. At our last auction in November we secured the sale of a parcel of land with buildings in Lutterworth within a matter of days of the auction brochure being printed. Contracts were issued to a cash buyer who secured the property within a matter of hours of his offer being accepted at the top end of the guide. Needless to say, the client was delighted to have achieved such a strong price to a cash buyer, thereby reducing their risk and exposure to wider market factors. Acting on behalf of a London based investor, we recently secured the sale of a small parcel of agricultural land in South Clifton near Newark. At just under 1 acre and with limited development potential the property far exceeded expectations selling for a record £50,000. We also recently secured the sale of a modern two storey office building at Park Lane in Basford set within an established business park at a strong sale price reflecting £122 per sq ft. The general consensus is that next year will be equally challenging, so on that basis if you are considering selling your property I strongly recommend you consider a sale by auction!

Simon Tivey

Derbyshire
By Simon J Tivey, Gadsby Orridge, 99 Friar Gate, Derby
Unsurprisingly retail space is the flavour of the month as we come to the end of Autumn and settle in to the Christmas period. Units that sat empty throughout the summer months are getting a second look from retailers considering the pros and cons of targeting any potential increase in trade over the festive season. With austerity measures in full swing in the wider economic climate there is certainly no chance of anyone getting carried away, particularly as retail in Derby is still far from buoyant with the market still saturated with available space, but for landlords willing to consider short Ðterm or otherwise incentivized lettings with on eye on the bigger picture, there are still deals to be done. Indeed we have recently completed lettings in the Sadler Gate area of the city which although not at previous levels, are still advantageous to all parties and the area as a whole. Units are also letting in other areas of the city centre and in secondary locations with deals recently completed on Osmaston Road and in the suburbs of Mickleover and Allestree among others. Deals have also been agreed elsewhere which should now be completed in time for Christmas with period retail / office premises in Uttoxeter being a good example. Away from retail, the office market is still proving particularly difficult due to the surplus of stock and this is expected to be the case at least in the short term while with regard to warehouse space, the smaller units are still letting but enquiries above 5,000ft_ are fewer in number at present. Ultimately it is a case of focusing on the positives as the current Governments plans for VAT increases and continued across the board cuts will mean conditions will continue to be challenging in 2011, making the austerity measures a necessary but hard to swallow medicine.

Shropshire
By Charles Howell, Partner, Pooks, Shrewsbury
"Good in parts" sums up the Shropshire commercial property market at present. Shops are letting in the usual pre-Christmas rush, with our Shrewsbury retail deals in Mardol, Butcher Row, High Street, Claremont Street, etc to a mixture of local and national retailers, included Rohan, Shelter and Totally Games In Wellington, major street works are almost finished and construction of the Civic Buildings is underway. Space is letting again and we have arranged deals at 32-36 and 51 New Street and have 46 New Street under offer. Rents aren't exciting, but landlord clients remain positive: "Well Charles, at least the property is producing £500 pa more than it did 10 years ago!" The office sector is also improving. Expansion amongst local professional firms shows a demand of about 35,000 sq ft for Shrewsbury offices. With rents at £12-£13 psf at Shrewsbury Business Park (£9-£10 psf elsewhere) development viability is marginal, but there is a better "feeling" than last year. In the industrial sector lack of development has increased demand for existing industrial/ warehousing space but there is reluctance by smaller companies to borrow, despite "local" banks having funds. However, small freeholds in lots up to £500,000 have proved to be popular. We have recently sold space at Battlefield Enterprise Park, Shrewsbury reflecting about £60 psf. Shropshire Council has provided a fillip to the market as the effects of the creation of the Unitary Authority work through. Disposal of outdated buildings is creating opportunities for residential or even medical concerns and take-up of new, efficient buildings has "saved" a developer or two. With cutbacks looming, however, the spending power from Shropshire's large public sector is bound to diminish. Nevertheless, developers are dusting off schemes again not only in Telford and Shrewsbury but also in the smaller market towns so 2011 could see some speculative activity again.

Jonathan Moore

Coventry and Warwickshire
By Jonathan Moore, Director - Investment Agency, Shortland Horne Commercial and Professional Limited, Coventry
ÔWith the quiet summer being, thankfully, a distant memory we now approach the winter with a hint of optimism in the commercial property market, but tainted with a degree of nervousness for what the future holds. In my specialist area, investment agency, the supply and demand issue continues as the market remains starved of stock but with plenty of investor requirements across the investor spectrum, admittedly for the ÔrightÕ product. Over the next few years, I predict that the UK will face a similar position with forces of supply and demand in the occupational market, owing to the current lack of speculative development, and this is undoubtedly the case in Coventry. On the face of it, it may appear a little brave for any developer to start building small speculative sheds in Coventry at the moment, but it is a worrying fact that the only warehouse under construction in Coventry is the new ÔRoyal Mail SouthÕ sorting depot at Orchard Business Park off Tollbar End in Coventry, the letting of which we agreed for our client Tiger Developments over two years ago. According to my colleagues, the occupational market in Coventry appears to have picked up a little recently; at the time of writing I am aware that we, along with our joint agents Savills, have only one unit left available at the speculatively-constructed office scheme at Whitley Business Park while there are now only two office buildings left at The Cobalt Centre on Middlemarch Business Park, and one and a half office units remaining at Oak Court, Prologis Park. I am also aware that the speculatively-developed small unit industrial scheme at 4020 Middlemarch Business Park is now fully committed too. As a note of caution to all those occupiers out there which are currently considering moving premises, I would warn that the window for achieving amazing occupational deals is closing as the stock supply dwindles. The tide will turn!Õ

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Last updated: 26 March 2009

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