Commercial sector in Essex and Suffolk remains buoyant

08 Jan 21

During the past year, the warehouse and industrial sector continued to show extremely strong levels of demand.

The acceleration in online shopping fuelled by Covid-19 put pressure on supply chains and our expectation is that both rental and capital values will continue to trend upwards during the next two quarters and beyond.  There has been an increase in demand for logistics space throughout Essex and Suffolk and with our offices well located for the A12, M25 and the ports of Tilbury, Harwich and Felixstowe, we are seeing a continued rise in the number of buyers and tenants seeking space across all size ranges in the area.

Fenn Wright have been involved in several notable transactions throughout the region and have a number of prominent new instructions now coming to the market, a selection of which follow:

SOLD: A substantial detached industrial/warehouse premises totalling 18,813sq ft at Europa Business Park in Witham which was marketed freehold for £2,100,000.

SOLD: A modern detached factory warehouse totalling 22,787sq ft on Beckingham Business Park, Tolleshunt Major which was marketed freehold for a guide price of £1,750,000.

FOR SALE: A freehold investment opportunity on London Road in Copford available for sale for £1,350,000 offering a gross initial yield approaching 7%.  The site comprises showrooms, workshops, a yard and self-contained residential accommodation on 0.78 acre/ 11,750sq ft and producing a rental income of £93,540 per annum, rising to £98,540.  For more information, please contact Lewis Chambers on 01206 854545.

One consequence of this pattern of rental growth in the B2 and B8 sector is that many rent settlements agreed in 2015/2016/2017 now lag behind market rates. Commonly rent review patterns are at 3, 4 or 5-year intervals and if you are approaching a review opportunity, please contact a member of our commercial team to discuss the potential to achieve an uplift.

We have seen continued demand for freehold investment properties across all lot sizes from private investors and property companies.  Over the past year we have seen a number of well let investment opportunities sell for significantly more than the original guide price.

As well as being involved in some large investment transactions, our Ipswich commercial team have been instructed on a number of sizeable properties on out-of-town retail parks where there has been a growing increase in demand as businesses look to relocate from the high street.  As consumer habits and retailer demand have changed throughout the years, landlords of retail premises have responded by diversifying their tenant mix, looking at alternative uses made easier through the recent changes in planning legislation.

TO LET: Large retail unit in in excellent location at Copdock, Ipswich, totalling 16,770sq ft adjacent to Tesco, with easy access to the A12/A14, close to park and ride facility and potential for alternative uses.  For more information, please contact Alistair Mitchell on 01473 232701.

TO LET: Units A & B, Army & Navy form a large open plan unit in a prominent position in Chelmsford comprising 8,895sq ft ground floor accommodation benefitting from A1-A5 and D1/D2 planning consent.  The property forms part of a larger mixed use scheme including an 81-bed Travelodge, 12 residential apartments and 7 retail/restaurant units.  For more information, please contact John Logan on 01245 261226.

Whilst central London office lettings took a hit last year, with the increase in remote working there is evidence of companies now looking to decentralise, creating regional hubs.  Some business owners have seen a significant growth in their turnover as a consequence to these changes such as tech companies looking to take advantage of the increased use of technology which has enabled so many of us to continue to work effectively throughout the pandemic.

We remain in a transition phase as businesses take on board the implications of the pandemic.  Our expectation is that the demands of occupiers could be very different in the future with businesses employing a variable mix of working practices and the need for quality, flexibility and the highest levels of connectivity being at the top of the list.

SOLD: The Aquarium, Chelmsford was sold off market for £3.4 million and comprised a fully let office building containing 16 tenants over 14,585sq ft.

FOR SALE/TO LET: Haven House in Ipswich is a substantial detached office building on the market with a guide price of £2,900,000 or on a new full FRI business lease at an initial rent of £395,000pa.  Understood to have been occupied by HMRC since it was originally built in the 1970’s, it is due to be vacated when the organisation relocates within the next few months.  For more information, please contact Alistair Mitchell on 01473 232701.

Despite the challenges of the past year, the commercial property market has continued to move forward in our region.  It will take time for things to settle down in the ‘new normal’ and no doubt occupier’s requirements will change with some properties being no longer deemed fit for their current use.  However, fresh opportunities will arise as new markets emerge allowing properties to be repurposed and sites redeveloped.  The one thing that can always be guaranteed about the property market is that nothing ever stays the same but there are a lot of great opportunities to be had for many.

Want to know more?  Register here to join our Virtual Property Market Update on 28th January, jointly hosted with Ellisons Solicitors and BDO LLP.  Our speakers will provide an update on the current market activity and discuss new developments.

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