Jason Thorne, Director in Lambert Smith Hampton’s (LSH)’s Industrial Agency team, looks at what the past six months have revealed in Swansea’s industrial property market:
There can’t be many people left in the business community untouched by conversations about uncertainty since the vote to leave the EU last year.
We know the familiar argument that enterprise favours certainty when it comes to investment decisions, so what have the last six months in the industrial property market revealed?
Of the transactions completed, over 35% of them were on a purchase basis – a figure which stands at a very high level compared to previous years. At the same time, capital values for freehold / long leasehold industrial properties have risen sharply.
A lack of supply has pushed prices up, yet companies have been confident enough to purchase as interest rates are still at an historic low, and banks are proving active in lending.
These are all positive signs and we know of several transactions driven by companies deciding to expand, investing in space that will accommodate their plans for future growth.
However, there is now little or no significant space available to purchase on the market. There have only been two or three schemes built to satisfy demand over the last 10 years and we are fast reaching a bottleneck in supply.
The hope is that this recent increase in capital values will attract more developers capable of delivering much needed quality accommodation for the market.
There are companies with ambition and investors willing to back them. Now we need to see that confidence and commitment mirrored with government incentives.
