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Are
we reaching
the
end of the
property recession?
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The level
of gloom and doom seems to be evaporating with a new
level of confidence - all be it early days. Improving
activity in land transactions are now emerging and we
at Walton and Hipkiss have taken the opportunity to
launch a new commercial property division to enable
clients to take the maximum benefit of the inevitable
change in the long term fortunes in the property
market.
The growing activity in the sector is being seen by
some as a sign that the worst of the commercial
property downturn is over and private investors are
ready to come back into the market.
Commercial property has taken a battering over the
past two years, with prices falling by more than 40
per cent from their peak in June 2007. But the latest
research shows the falls are coming to an end.
“Investment Property Databank’s” most recent figures
for July show that values of certain types of property
are rising for the first time since 2007 and its
benchmark index is yielding close to 8 per cent.
Overall, UK commercial property values are poised to
“go positive” for the first time in 25 months and
rents are falling less rapidly.
Stourbridge will see a new Aldi store opening later in
the year opening in the former B&Q unit on the ring
road. Confidence from the retail sector including
Tesco’s future plans seem a further sign of confidence
and breath of life coming to the market.
Levels of commercial property enquiries across the
board are improving and life also returns to the
residential market both in sales and lettings , in
particular the latter.
Enquiries for development land are also improving
especially for retail and industrial. residential land
still lags behind but the "clever" money seems to be
emerging with some deals now being done on and off the
market.
Clearly the recession is still not totally over but I
envisage across the next 12 months higher levels of
confidence with funders being prepared to release
finance on more acceptable terms - enabling the
development market to perform. End users and occupiers
have downsized through the worst period and now there
are signs of growth with enquiries up to relocate or
extend there occupation - primarily across the
industrial and office sector.
In an uncertain economic climate it is crucial to have
informed guidance and advice in order to maximise
assets and avoid pitfalls. Few landlords are aware
that if a tenant goes into liquidation, the tenant is
responsible for payment of the business rates. A
company in liquidation is exempt from paying business
rates. Once a landlord accepts the keys from the
liquidator they accept the liability for payment of
the rates. Ideally the keys should not be accepted by
the landlord until a replacement tenant is secured.
So the adage is slowly slowly but now is the time to
plan ahead and indeed good deals can still be done -
be cautious but not afraid to consider your future
property requirements and disposal strategy.
Alan K Knight FRICS is the new Head of Commercial
joining Walton and Hipkiss following 30 years
successful career in commercial property agency,
development and agency across the Greater West
Midlands Conurbation. Alan has three grown up
daughters and lives in Hagley.
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