Growth in the commercial property market in Worcestershire could be stifled in 2015 through lack of supply, according to forecasts by leading Midland independent property consultancy GJS Dillon.
The strengthening warehouse and industrial markets are being put at risk by a lack of supply, particularly in the medium-sized 20,000 to 50,000 sq ft sector. The same is true in the office market where smaller offices are in short supply and the supply – particularly for purchase – of larger, good quality office space is sporadic at best.
John Dillon, partner at GJS Dillon, said the industrial and warehouse market in the county had shown encouraging signs of growth but a major shortage of stock.
“We are certainly seeing an up-lift in the warehouse and industrial markets, but supply is extremely constrained. As a result those properties that do become available are taken up very quickly. For example we agreed the sale of a 16,000 sq ft high-bay warehouse building in Sherwood Road, Bromsgrove in the first week of marketing. This was off the back of the letting a month before of a 28,000 sq ft warehouse in the same road to Siemens,” he said.
He added, “On the acquisition side we did an active search for a local manufacturing company looking to take on around 20,000 to 25,000 sq ft in Worcester and ended up acquiring a 22,000 sq ft unit at Stonebridge Cross, Droitwich as there was nothing on the market of that size in the Worcester area.”
He said that small offices in the 1,000 to 5,000 sq ft sector to buy in Worcestershire were in short supply because there had been no speculative development for the last five years.
“There is a serious shortage of smaller office units and those that do become available are snapped up. For instance the Topaz Development in Bromsgrove is now fully let or sold, as is the sister site at Wildwood Triangle in Worcester, both of which we manage for the owners.”
“The market for larger, good quality office space is sporadic at best. Anyone holding good Grade A or refurbished open plan Grade B office space is in a strong position. Landlords with cellular office space will find less takers in the market, so they should consider either refurbishing, or taking advantage of relaxed rules which would allow them, if appropriate, to convert them for residential use,” he said.
But he said that 2015 could see the resurgence of the commercial developer.
“There is no doubt that the demand is there, and we are on the lookout for potential development sites for developers or existing commercial properties to fulfil demand when acquiring for local companies. We have a track record of finding suitable premises for companies – very often off-market before they are advertised,” he said.