The commercial property market follows the wider economy closely so there has been a slow but marked improvement since the second half of 2008. The recovery has remained quite fragile and the decisions of the new government will have an impact on all companies and individuals, with the budget on June 22nd awaited with some trepidation.
The commercial property market is made up of Industrial, Retail and Office premises but these sectors have not been impacted in the same way. Retail rents in prime locations have increased above 2007 levels with secondary locations improving as supply is reduced but poorer locations are still difficult to dispose of and there is not much hope of improvement in the short term.
The office rental market is split with an improving level of interest in premises up to 1,500 sq ft but a marked reduction in enquiries above this level. In fact there have only been two lettings in St Albans City Centre above 5,000 sq ft in the last 18 months. Landlords have been looking at splitting units where possible and we are likely to see an increasing number of applications to convert buildings into residential. The freehold market has seen a slight increase in the number of available properties and prices have remained below 2007 levels.
The industrial market is unpredictable with generally lower levels of enquiries but there has not been a significant increase in supply so rentals have reduced but not dramatically.
The outlook is one of quiet optimism. It is still a good time to purchase buildings with lower prices and more opportunities then experienced for a number of years. We have seen an increase in the numbers looking for freehold properties and we have quite a few on our books which should sell readily. It is hoped that the upcoming budget is not so severe that it stifles growth!