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Miller Commercial The South West


Forget tin mines, Cornwall is proving to be a gold mine of opportunities for commercial occupiers and investors alike as the strength in the local economy means record low vacancy rates across the business parks and trading estates and investors are seeing rental growth and yield compression across their commercial portfolios.


Reports Thomas Smith MA BSc MRICS Head of Commercial Agency.


Thomas Smith


Indeed, a recent report by property data analysts, Costar, reveals that Devon and Cornwall have the lowest industrial vacancy rates in the whole of the southwest (2.1% of total stock), compared with 4.6% in


Bristol for example. On one side, this is great news.


Small to medium sized manufacturing and industrial sector businesses are flourishing, taking up much of the available stock.


But for those businesses looking to expand, upgrade or move location, this presents a dilemma – there’s nowhere to go to.


This has been further highlighted by a recent development of 18 brand new light industrial/office hybrid units on the outskirts of Falmouth on Cornwall’s south coast, which were all sold off-plan at prices hitting £100 per sq ft, a record high for vacant commercial property in the county, underlining the demand from both owner occupiers and speculators alike and reinforcing the business confidence in Cornwall and the South West economy in general.


But what can break this deadlock of supply?


There is a chronic need for small business units in all areas of Cornwall but into Devon as well and it requires speculative development from both the private and public sectors to provide good quality, fit for purpose units, not overly specified but sufficient to satisfy the needs of businesses that are as far ranging as distillers and brewers, through to niche skin care producers, jewellery and clothes designers to digital agencies and the ever growing need for more space for logistics and distribution.


In the investment market, as part of a wider national trend, the appetite for industrial and warehouse investments in Cornwall continued unabated with several multi let industrial estates being sold in Newquay, Redruth, Liskeard and Camborne with yields compressing down to 7%, levels not seen before.


With property values beginning to reach a threshold point, the reasons for not building speculatively start to fall away and we would hope to see more building projects on the horizon.


While the wider political market remains uncertain for the foreseeable future, what is more certain is that local occupiers are in the most part trading well and they want to invest in their businesses and with a little helping hand, in terms of a greater supply of good quality, fit for purpose units, it feels like Cornwall’s economy can aspire to be as it was back in the bygone era of the tin mines.


60 COMMERCIAL PROPERTY MONTHLY 2019


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