Demand remains strong for business space across the region
Despite the ongoing pandemic, the market for business space in both Essex and Suffolk has remained remarkably robust over the past 12 months with our Commercial agency team completing well over 200 sales and lettings across the industrial, office and retail sectors. These accounted for £41,598,000 in sales and lettings and produced a total combined annual rent of £5,740,400. Alistair Mitchell provides an overview of the commercial property sector and looks ahead to what lies in store as we head into the new year.
As many commentators have already highlighted, the logistics sector has been boosted by the pandemic with a significant increase in enquiries, most particularly for last mile delivery facilities. Demand for warehouse space has been insatiable and the shortage of stock has led to premium freehold prices and rents being achieved, in some instances significantly over and above quoting terms.
Some have questioned how long this appetite for space will be sustained and whether the various big box schemes now taking shape will lead to a surplus of supply. However, so far there doesn’t appear to be a decline in the number of enquiries we are receiving and now that the outline business case for Freeport East has been formally approved by Government, the region is very well placed to prosper from the ongoing expansion in this sector of the market which, if you believe the statistics, still has a long way to go.
Below are some notable industrial transactions from our commercial team:
The sector has had to grapple with the implications of changing working practices, leading to businesses being understandably cautious about committing to new premises. However, over the second half of last year it became apparent that occupational decisions were starting to be made, which led to a number of successful new lettings. We expect this trend to continue and accelerate as businesses settle into their new normal working patterns and our agency team continue to receive new enquiries from companies considering decentralisation or looking to expand their office footprint in the area.
We are currently acting for several companies looking to relocate in the region and have also seen many blue-chip companies, such as AON, Vistry Homes, Morgan Sindall and ESS renew their leases, demonstrating their commitment to maintaining their strong presence in the region.
Although it’s far too early to suggest any kind of boom in the local office market, there are most definitely some positive signs which have emerged over the last year. One thing is for sure though, local companies are becoming much more aware of the importance of their working environment for a whole host of reasons, and most will be looking for the very best accommodation available, leaving secondary stock to be converted to alternative uses.
Some of the more significant office transactions over the last 12 months include:
It will not come as news to many that the retail sector has struggled throughout the pandemic, with the closure of large retailers such as Debenhams hitting the High Street hard. The spread of Omicron has meant that high street footfall is down once again, although those retailers who provide an online platform are likely to see an increase in sales.
We have inevitably had to deal with several retail insolvencies over the year, although it’s not all doom and gloom, as a more subdued market has allowed new independent retailers to secure premises which would previously have been out of reach, and of course certain sectors including discount food, roadside drive-thru and the like have continued to thrive.
So, what does 2022 hold for us in terms of the market for commercial space?
Suffice to say, we predict the booming warehouse market will continue well into the new year and beyond and we are working with several developers on a number of exciting new schemes. The office market may still be coming to terms with the new way of working and changing priorities, although we anticipate more occupiers coming forward this year as future space requirements become clearer. The retail sector is likely to continue to see challenges, although as new independent retailers and alternative uses fill the void created by the demise of some of the larger multiples, maybe our regions towns will ultimately benefit from a more varied and diverse high street in the future.