The lack of development since the start of the downturn in 2008 and the steady take up of commercial space over the last few years has led to the shortage of prime commercial property in the region.
'' There is no doubt that whereas 2 or 3 years ago an occupier might have had a dozen or so options to choose from, occupiers are now finding it increasingly difficult to source quality stock. Demand levels are not running away but dwindling stock levels in certain types and sizes of commercial property will start to increase the pressure on pricing.''
A number of key factors have contributed to the overall problem including
- Lack of funding for new development projects, particularly speculative development
- Imposition of business rates on vacant commercial properties discouraging development
- General lack of confidence in the development and construction sector, to date, is starting to take its toll.
Jones continues "price hikes could be quite steep when they come in the next couple of years for quality second hand stock. Part of the issue is that the current price difference between quality stock, which might be 6 or 7 years old and the level at which developers can justify building, can, at present, be as much as 50%. What this effectively means is that when there is little availability of a certain size of commercial property and the only option an occupier has is to build, then this will ultimately lead to a narrowing of the price gap with new build properties."
If you have been thinking about moving for some time, 2013 should be the time to make that decision.