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Jones Lang LaSalle says Midlands property market prospects looking positive24th January 2013

Some 80 property professionals braved the snow and ice to attend Jones Lang LaSalle's annual Midlands' 'Question Time' Property Predictions event chaired by its Midlands' chairman, Jan Thompson - a better than expected turnout given the weather conditions.
Despite a chilly start to 2013, Jones Lang LaSalle left those attending with a sense that the market was showing signs of warming up and heralded the return of words such as 'green shoots’ and 'speculative build' towards the end of the year.
Jon Neale head of UK research at Jones Lang LaSalle said: "Figures suggested that the region appeared to be more confident about business prospects than those further North, with the West Midlands showing the fastest predicted GDP growth of any other region outside Greater London and the South-East at 1.3% for 2013 .  Birmingham too forecasted stronger growth than many of its counterparts at 1.4%."  However, he offered a note of caution about the region's reliance on the industrial sector growth and resurgence of the automotive industry and JLR adding: "The region needs to nurture start ups and ensure the prosperity created from manufacturing is used to develop emerging and hi-tech industries to provide sustainable long-term growth."
Allan Wilson, head of capital markets in Birmingham said they were seeing a recovery in the occupational markets and that conversations concerning industrial speculative funding were getting longer and more positive.  He said:  "We are already seeing evidence of speculative development in the South-East in very selective markets.  No spec funding was witnessed in our region in 2012, but we saw a number of funds backing developers on land deals and Jones Lang LaSalle acted on two deals putting equity backers together with developers.  The next phase will be to see spec funding but scheme choice will be highly selective, prime only and likely to be led by one of the specialist warehouse developers."
Jones Lang LaSalle's new UK chief executive, Guy Grainger, said he believed the property market still had a big role to play in the growth of the economy and the region but that the recession had changed the rules.  Now he said, it was all about the occupiers and only those developers who moved with the times would win through:
"In offices, occupiers are looking at greater sustainability and energy cost savings. What would have been laughed at a few years ago in terms of green offices is now being held up as an exemplar of best practice and is breaking new territory such as the Co-operative Group's new HQ in Manchester, which has received the highest BREEAM score ever and is already attracting the attention of serious international investors. 

"In the housing market, the constraints on mortgages has also meant the ‘stigma’ on renting had shifted.  The Private Rented Sector has grown by 47% over the past five years and is opening up a whole new way of thinking about how housing is supplied.  Urbanisation too is seeing a huge flight of people wanting to live and work in the cities.
"Retail is changing with the UK embracing on-line retailing more than any other country in the world, but far from doing away with bricks and mortar, retailers are looking at omni-channel distribution and for the first time Amazon will add a store into its mix.  Towns and cities need to adapt in the same way retailers have adapted to changing consumer demands and look at developing the public realm, adding more leisure facilities and making parking simpler and more low cost to attract people.  The rebuilding of Birmingham New Street is a great step for the city." Added Mr Grainger.
Ian Cornock, lead director, Midlands for Jones Lang LaSalle talked about 2013 being a significant year for infrastructure projects for the region and praised the construction industry for lobbying hard on the importance of these projects to stimulate growth:  "In the short term we would see the positive effects of the first phase of Birmingham New Street opening, the extension of the Metro and the new runway at Birmingham Airport and in the long term we have HS2.  However the blighting of land along the route would need to be resolved sooner rather than later, so that important proposed developments could proceed such as UK Mail's £25 million expansion of its depot at Washwod Heath.

Ian Cornock said: "Exciting times lie ahead for Birmingham and the property market.  The LEP’s are in place but it is vital that at the very least  the most important recommendations of the Heseltine Review  are implemented and that the Big City Plan is advanced.  The property market needs to see positive outcomes from each of  these over 2013."

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