Commercial Property in the South West: Interview with Alison Williams, Associate Partner at Carter Jonas
How would you rate the overall situation of the commercial property market in the South West at the moment?
“We remain relatively optimistic about the market, however, there are many nuances and the recent announcement of Honda closing its operations in Swindon serves as a huge blow to the region as a whole. Undoubtedly, it will also have an impact on the commercial property market. And whilst it presents a number of challenges as well as opportunities, our market doesn’t work in isolation; it’s all about business, employees and location. Good infrastructure and access to talent pools are key considerations for many occupiers. It could be argued that the region is still somewhat behind other UK business and industrial hubs in its efforts to attract investment into these areas. The South West needs to adopt a similar, coordinated approach to business, infrastructure, transport and planning issues to help direct investment, and the businesses that it attracts, to the region.
Have you seen any trends emerging in the commercial property market in the South West in the past year?
“We’ve seen increasing demand for office space from tech and media companies over the last 12 months and it is extremely exciting to see the organic growth of this sector in the region. Another positive is the number of US companies choosing to have an office here. Whilst the retail market is having to evolve, predominantly due to the rise in popularity of online shopping, it is encouraging to see that demand for retail space has remained strong and more independent retailers entering the market. Although the industrial market continues to show signs of resilience – particularly in areas involved in logistics and e-commerce – Brexit uncertainty is affecting the decision-making process for some occupiers and the supply and demand imbalance of industrial stock persists across the region.”
How are the different commercial property type markets doing individually?
“There is an acute shortage of quality supply across the office market and limited or no speculative development. Demand has remained strong despite the wider economic uncertainty and there remains upward pressure on rental values. A number of potentially transformative office/mixed-use schemes are in the pipeline in Bath and Bristol. However, development will need to be phased to avoid replacing a problem of undersupply with one of oversupply, and the size and type of space provided will need to be appropriate for market demand.
“In the retail sector, there is a trend towards smaller independents in many markets across the region. We believe this will help support city centre retail with institutional investors and other landlords being more flexible on covenant ‘tests’.
“Occupier demand in logistics and e-commerce continues to be buoyed by structural change, and this is driving developer interest for speculative schemes across the region. However, as distribution requirements become increasingly bespoke, more occupiers are looking to buy land and develop their own buildings.”
Thank you to Alison Williams at Carter Jonas! Click here to view properties listed by Carter Jonas on NovaLoca.