commercial property
Industrial sector’s low rents restrict land available for development
Developer Andy Jansons outlined one of the key concerns facing the commercial property sector when he addressed hundreds of professionals at the Five Counties Conference in High Wycombe
Andy Jansons, managing director of Jansons Property, illustrated how land for industrial developments is being lost to other uses because of the sector’s low rents, while residential and office uses were able to command much higher returns. The result was to push up rents and capital values for industrial.
He acknowledged the pressure local authorities faced to meet housing targets and stressed that the workplace was not all about offices.
He told delegates: “I think we have to get back to basics. The office market is quite strong but we’ve got to make things. Where does manufacturing go?”
The diminishing supply was highlighted with some real life examples. Just two acres of Kier’s 20-acre Reading Gateway scheme was allocated for industrial use at a site which had previously been all industrial.
In one scheme in Maidenhead, Jansons Property was advised that building 1,500-2,000 sq ft units could attract £200 per sq ft in capital value.
Jansons said: “That’s unbelievable when you’ve got some office buildings selling for the same price which cost £100 per sq ft to build.”
Jansons Property bought the 10,000 sq ft former police station in Windsor to convert it to apartments, but witnessed a sea change in the market when permitted development rights were later introduced, allowing conversion to residential without planning permission. That prompted a rise in office rents due to reducing supply.
Andy Jansons 01494 679977
info@jansonsproperty.com jansonsproperty.com
Jansons said: “When we had a look at our building again when we happened to get a vacant floor, having bought accommodation in at £21 per sq ft and were about to refurbish a floor, we found we will be looking at £35 per sq ft.”
In summing up, Jansons told the conference: “We should also be thinking about industrial and warehouse accommodation because not only have we lost it but we are losing it all the time. Somewhere, somehow, we need to be allocating land for industrial and warehousing development.”
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businessmag.co.uk THE BUSINESS MAGAZINE – THAMES VALLEY – APRIL 2017
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