Seeds of growth as speculative schemes get off the ground
29th June 2011
With the completion of several new speculative schemes in Leicestershire there are tentative signs that developers may once more be prepared to take a risk in obtaining occupancy.
Malcolm Grayson, Director at leading Midlands commercial property specialist Andrew and Ashwell, assesses trends on the Leicestershire scene:
Speculative development is the lifeblood of the commercial property market. It brings new, high quality, property, often using innovative building techniques, to the market. This is highly attractive for occupants who want to raise their profile, boost standards and improve their business prospects.
New premises keep business moving, helping occupants to look good and prosperous and enabling developers to embark on prime quality schemes. In turn this frees up older, secondary premises for smaller companies moving up the property ladder.
Potential occupants naturally want to see what they are letting themselves in for and to have potential premises up and ready to view before they commit to purchase or leasing serves to nurture demand.
Recession and economic instability, the ongoing reluctance of the banks to lend and the unwelcome burden of empty rate liability, continue to dog the progress of developers who are keen to get new schemes off the ground.
But several proactive Leicestershire developers have demonstrated they are not prepared to wait around any longer for the economic scene to change in their favour and a clutch of new schemes coming to fruition is bearing positive results.
Leicestershire-based distribution, warehousing and property specialist HW Coates has recently completed a new speculative development for smaller businesses at Cosford Business Park, Lutterworth. The development of 14 high quality units is attracting substantial interest, with several deals in the pipeline.
The former General Electric factory at Rushey Mead, north of the city centre, has recently been demolished, with the 19-acre site set for redevelopment by Solihull-based First Industrial Developments.
A speculative industrial development by William Davis Ltd; at Airfield Business Park, adjoining the new Innovation and Business centre near Market Harborough is attracting high levels of interest, with four of the first six units sold before completion.
Meanwhile, Whetstone-based Westleigh Developments, which manufactures its own timber frames for commercial and residential construction, is actively seeking new sites and is in the process of acquiring land for forthcoming schemes.
The refurbishment and adaptation of cheaper, secondary buildings is also a good budget option, evident on the Whittle Estate at Whetstone, which is undergoing a major facelift.
It has been two to three years since any major speculative development got underway, as the risks of not being able to sell or let were too great. However, banks and debt situations have now begun to stabilize and developers just want to get out and do something.
Tentative signs are that the economic situation is beginning to ease, as many businesses are actually doing quite well, even though confidence in the wider economy is still shaky.
