Page 64 - Home and More 2023

CHRIS WILSON BSc (Hons) MRICS DIRECTOR, HEAD OF COMMERCIAL AGENCY
2023 is proving to be a very different year to 2022 with yields very quickly moving out by 1.5-2% after the September 2022 mini budget. With the subsequent series of base rate rises, investors are being far more cautious and increasingly looking for better returns before purchasing.
Energy Performance Certificates are now a key issue for Landlords following the 1st April 2023 legislation requiring virtually all commercial buildings to have a valid EPC, whether let or about to be marketed. More and more landlords/occupiers will now have to remove gas heating and replace it with electric to achieve a valid EPC.
There is still a shortage of industrial/warehouse stock but noticeably improved tenant demand as the cost of borrowing continues to rise.
A number of high quality office refurbishments have attracted some good quality tenants at improved rental levels. This will be welcome news to those Landlords that had the foresight to commit substantial capital expenditure before re-letting.
CURRENT MARKET CONDITIONS
Industrial/Warehouse
▪ Increase in demand from tenants
▪ Prime rents/prices - £11 / £175 per sq ft
▪ Starter unit rents/prices - £15.50 / £275 per sq ft
▪ Increased demand from indoor sports/fitness operators and online retailers ▪ Shortage of freehold units and employment land
Offices
▪ Prime rents - £23 per sq ft
▪ Greater focus from employers to provide higher quality accommodation
▪ Approx. 30,000 sq ft currently under offer in Bournemouth town centre/Lansdowne ▪ Limited Grade A accommodation
▪ Continued redevelopment of larger buildings to mixed use schemes
Retail
▪ Increased demand from non retail uses following Class E merging ▪ Suburbs and market towns performing well
▪ Strong demand for all freehold opportunities
▪ Roadside and out of town retail thriving
▪ Good demand for hospitality and leisure uses ▪ Strong demand for Winchester City Centre
Hotels, Leisure & Business Transfer
▪ Summer hotel trade remaining buoyant post COVID
▪ Specialist finance brokerages proving viable alternative to absent High Street lenders ▪ Short break market thriving in resort locations
▪ Increasing numbers of profitable businesses coming to the market
▪ More competitive premiums fuelling demand
▪ 5 Star Nici Hotel shows strength of UK seaside towns
Investments
▪ Prime Yields: Industrial: 6%, Retail: 7%
▪ Good demand for retail in the suburbs up to £500,000 ▪ Funds still keen on buy to rent residential
▪ Investors like properties with angles
64
goadsby.com
COMMERCIAL