Property Market Review

As we all know, market conditions have been challenging to say the least in the last few years during the recessionary period and it has been very much a case of ‘making do’ with what you have got, given that the cost of moving would impact directly on a company’s cash flow as Banks in the early years of the recession were singularly unsupportive. 

As business confidence has picked up, we have seen the market place change quite dramatically since September of last year in that there are many more companies seeking to expand or relocate but many occupiers perhaps have not realised that the market place is more fluid and the Banks are now very keen to explore fresh business initiatives.

The challenge in the market place is generally a lack of stock available to occupiers looking to relocate. This has not only fuelled increases in new developments coming out of the ground for industrial/warehouse properties, but has also seen increases in both rental and freehold values through a lack of supply and general movement of companies. We have seen the same pattern right across North London, North M25, West Essex and Hertfordshire.

A sample of our completed deals in recent weeks includes:

  • Leasehold search and acquisition project for a private client for a 42,640 sq ft warehouse on 1.7 acres in Marsh Way, Rainham, Essex
  • Leasehold search and acquisition project for a private client for brand a new 24,878 sq ft warehouse in Abbey Road, Park Royal NW10
  • Virtual freehold sale of a 1970’s warehouse of 11,562 sq ft in Lincoln Way, Enfield
  • Virtual freehold sale of a 1980’s warehouse of 10,402 sq ft in Baird Road, Enfield
  • Freehold sale of a 2000 built 2 storey business unit of 11,722 sq ft in Aden Road, Enfield
  • Freehold sale of a 2006 built warehouse of 21,260 sq ft in Crown Road, Enfield

In North Hertfordshire we are seeing the industrial market continue to gather momentum which has resulted in a shortage of stock.   By way of example:-

Acting on the Access Scheme in Gunnels Wood Road in Stevenage, we have let 4 newly built warehouse/industrial units of 2,670 sq ft each in the space of 3 months. Two more units are being released shortly and we expect a similar outcome.

We are also experiencing a gradual increase in office demand across Hertfordshire although the bulk of space being take up is for smaller suites from 100 sq ft up to 2,500 sq ft.   Larger office buildings designated for alternative residential conversions are being snapped up. A case in point, acting for Telereal Trillium we have recently sold a freehold town centre 4 storey office building of 20,483 sq ft in Danestrete, Stevenage bought for residential conversion.

It is good to see that business confidence generally is on the rise across Herts, Greater London and the South East and we see no reason why this should not continue as the economy shows signs of increasing recovery.

In the retail sector, we have found the market to be very area dependent. There is a strong demand for secondary to tertiary locations and a fair degree of variance in rents from £10,000 to £25,000 per annum.

The prime retail locations are holding up but they are still notable vacancies as tenants are cautious to commit to high rents that high streets demand. We are also finding that demand for retail/lock up units is now coming from non traditional users such as training facilities, language schools and health related users such as osteopaths, chiropractors, etc. To summarise, there are occupiers out there willing to take units but it does require flexibility from a landlord to explore the potential of non traditional routes of retail.

As a consequence of this increase in market activity our professional division has seen a marked increase in instructions for valuations for a variety of purposes but especially secured lending and development appraisals with valuations totalling just over £60m being undertaken in May.

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Ian Harding details