The RICS Commercial Market Survey for Q3 2014 has reported that the recovery in both the occupy and investment sectors retaining plenty of momentum, as demand for commercial property is increasing and availability deceasing. The industrial sector is showing the strongest results, which bodes well for the continuation of the economic recovery. The Survey reports that the gap between fresh demand and supply has widened over the quarter, with the disparity most pronounced in the industrial and office sectors. Rent are expected to increase in both the office and industrial sectors at the fastest pace since 1998, although expectations are more muted for the retail sector. The RICS survey reports part of the decrease in the supply of offices is resulting from the introduction of Permitted Development Rights, allowing empty office space to be converted to residential.
In the investment market, enquiries are continuing to increase according to the RICS Survey across all sectors of the market. There was also a notable reduction in the supply og investment property on the market, particularly in the industrial sector. The Survey reports that capital values are expected to register strong growth in each sector in the coming quarter.
RICS Survey contributor, Andrew Kilpatrick of Kilpatrick & Co says “with the increased demand and falling supply, there are already distinct shortages or certain types of property in Swindon in certain size ranges. This is partly because of the lack of new building starts since the onset of the recession. In Swindon there is very little Grade A office space available and no new development underway. Swindon’s office supply is also being reduced by the conversion of office buildings to residential, which is a welcome initiative when is happens to old, functionally redundant, long empty town centre office buildings, but not so welcome when out of town office buildings, such as those at Westlea Campus and Delta Business Park are considered suitable for residential conversion. The lack of suitable office buildings in Swindon could lead to a loss of economic activity from Swindon, if existing businesses are unable to find suitable relocation opportunities and so are forced to move out of town.
Confidence in Swindon’s commercial property market has been boosted by the early sale of the new Regent Circus leisure investment in advance of completion at above the asking price, showing good investor demand for quality property. Other recent investment deals in Wiltshire include Borough Parade Shopping Centre (87,000 sq ft) in Chippenham, Chippenham Retail Park (43,351 sq ft), and Three Horseshoes Walk Shopping Centre in Warminster (60,000 sq ft).
