Leicestershire Commercial Property Market - Qtr 2, 2008
1st August 2008
Certain areas of the Commercial Property Market are reacting faster to the economic down turn than others, reports Malcolm Grayson Partner of Andrew and Ashwell Commercial Surveyors. “In Particular investment yields are 1-1½% higher than 12 months ago, with the profile of purchasers dominated by cash rich bargain hunters.
The industrial sector is fairing reasonably well, particularly for better quality premises. We are still selling and letting many of the better quality buildings very quickly principally because the supply of good quality industrial property in the county remains very limited.
The office sector is more difficult, since unlike the industrial sector, there is some surplus which has built up over the last 18 months as the sector had a period of exceptional rental and capital growth. This stock will take a little time to become fully occupied and as a consequence tenants and purchasers are likely to benefit from good deals during 2008.
Commercial land sales remain extremely limited, partly due to the current down turn, but also because of an inherent under supply. There is an expectation that building costs should fall over the next 12 months in response cheaper labour, although the costs of raw materials will probably increase so margins are likely to remain tight in the medium term.
Leicester Highcross (the Shires extension) is due to open on 4th September 2008 and this is much awaited within the retail sector which is suffering from reduced consumer spending. With 120 stores and 15 restuarants/cafes, this will give a boost to the sector. It is anticipated that the pattern of footfall may shift away from Gallowtree Gate towards High Street and Market Street as Leicester Highcross establishes its influence on shoppers. We are therefore looking to 2009 with some interest”.