We can look back on 2012 with some fondness I think, we had the Queens Diamond Jubilee, the Olympics and The Paralympics, all of which gave us a sense of patriotism and optimism. We even had a guy skydive from outer space! On a work note, it’s hard not to wonder what 2013 will bring for the Black Country commercial property market, and of course look back at 2012.
The most recent RICS UK Commercial Market survey reports a fall in occupier demand in quarter 3 and an increase in supply in the first three quarters. In respect of the Black Country market though, demand has remained steady for 2012 and supply, if anything has become limited and development activity has remained low.
The problem has been compounded by some of the deals done this year. To mention just a few, Helix have taken 35,000 sq ft in Kingswinford, Toolbank have taken 60,000 sq ft in Lye, Folkes Properties have agreed two 60,000 sq ft lettings at Britannia Park in Wednesbury and Vernon Park in Wolverhampton is now fully let/sold which totals 127,000 sq ft. Add this to the numerous buildings of 15,000 sq ft plus currently under offer with solicitors and you begin to understand the problem. Let’s hope that this shortage will finally convince developers to take the plunge and dare I say it, do some speculative development. The issue then of course is finding suitable sites, but let’s not get started on that and the problem of Local Authorities giving planning consent for residential development on industrial sites, that’s a story on it’s own.
Although a year or two off, a potential concern will also be the announcement by the Government that they are going to delay the business rates revaluation by two years. I’m sure that many struggling businesses will have been eagerly waiting the 2015 revaluation of their business rates liability to offer some relief from high rates. The government claim that the delay is to help occupiers, but it actually means them paying business rates that are based on property rents from 2008, close to the peak of the market, until 2017!
Some experts predict that 2013 could bring an improvement with construction activity improving and incentives being reigned in slightly. Others predict that the market will fall, reflecting dwindling investor demand. In other words, we can’t be sure, but the signs are of cautious optimism so we all need to continue to be positive and hopefully 2013 will be a good year for us all.