Prices for new industrial properties across Worcestershire are set to reach new highs due to the shortage of quality units coming to the market, according to one of the county’s leading commercial property agents.
John Dillon, Managing Director at commercial property consultancy GJS Dillon Limited, which has offices in Droitwich, Worcester and Bromsgrove, says that a lack of available new and quality second hand industrial stock is pushing up values.
“Demand is far outstripping supply for industrial units between 3,000 sq ft and 40,000 sq ft, as manufacturing and distribution businesses in the county continue to invest in new premises and show increasing confidence in the post-Brexit economy,” says Mr Dillon, whose firm has disposed of more than 60,000 sq ft of industrial property in the last three months.
“This is placing upwards pressure on prices, so within the next six months I would expect to see new build industrial units up to 5,000 sq ft in the right location in the county touch as much as £120psf, while similar units to rent could reach £7psf.
“Although they are not going to achieve the same levels as for new builds, prices of good quality second hand units in established business park locations are increasing quarter on quarter, and when they do become available are highly sought after, frequently going to best and final bids,” says Mr Dillon.
“For freeholders there has never been a better time to sell or to rent, but it’s not just as simple as putting a building on the market. To secure the best price on the best terms, and to find the optimum buyer or tenant, it is advisable to seek to professional advice from a local Chartered Surveyor.
“This is especially true when a landlord rents a unit with the intention of securing a commercial loan against the property or later selling on the investment, as its value can depend as much on the strength of the tenant’s covenant, as on the quality and location of the premises.”
According to Mr Dillon, the shortage of industrial units means that businesses which want to relocate are having to spend more time and money looking for new premises, and if they do identify a suitable building are often missing out.
He says: “We encourage anybody looking for industrial or office premises in Worcestershire to register their needs with us, then they will be at the front of the queue when we put a new building on the market.
“If they merely rely on waiting for premises to appear on the property portals, it is often too late and the unit has gone.
“Businesses looking for industrial units of 10,000 sq ft or more can also use our specialist Business Relocation Service which will identify a business’s needs, space requirements and budgetary constraints and then search on and off the market for a property, as well as, if required, disposing of the old premises.”