property
Boldly going…
Haslams have recently published their latest annual Reading Industrial Market Property review. We thought it would be interesting to remind readers of the previous years’ reports and provide a snapshot of the most recent publication, writes Neil Seager, partner, Haslams Chartered Surveyors
2014 – The Market Awakens
2014 saw the first green shoots of recovery following one of the worst downturns in the commercial property market. The lack of development during the downturn meant that stock levels were low which was not ideal as demand levels spiked. Previously occupiers had resisted the need to relocate or expand. However, the lack of new development held back prime rents. The desire to optimise the speed of delivery of goods purchased on the Internet was partly driving the demand in the market. Freehold owner/occupier demand was starting to come through as occupiers sought to make the most of low interest rates. The banks though, remained cautious. The weight of cash continued to drive the investment market as sales completed ahead of quoting terms. Could yields harden further over the coming years?
2015 – The Search for Stock
During 2015, investors and occupiers all struggled to find stock. Development needed to commence to satisfy demand, but developers and institutions were weary of making the same mistakes as last time around and remained fairly cautious. This meant the level of supply was unlikely to increase in the short term. Evander bucked the trend by securing planning consent for 250,000 sq.ft at Island Road. The lack of investment stock meant that those properties that did sell in the year were fiercely fought over resulting in further improvement in yields. Surely yields could not go any lower.
2016 – A Rogue One
The political and economic events of 2016 could not be ignored. During the middle part of the year the market froze only to return in the final quarter with all guns blazing. Investors fought over stock resulting in record yields which will be further improved in the first quarter of 2017. Stock levels continued to fall, but the development at Island Road (250,000 sq ft) which is due to complete shortly will provide a much needed improvement in this regard. The dearth of stock is highlighted by how close competing units are to Reading. For instance if you wanted a 120,000 – 160,000 sq ft unit you would need to travel 46 miles. Finally, wild ideas for the future of logistics were discussed to include flying warehouses (yes really).
A copy of the 2014, 2015 and 2016 reports can be downloaded via the News section of Haslams website.
Neil Seager 0118 9211515
www.haslams.co.uk
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businessmag.co.uk THE BUSINESS MAGAZINE – THAMES VALLEY – FEBRUARY 2017
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