Commercial Property Report from Phil Eggerdon of Eggerdon and Holland.
The Surrey commercial property market continues to be a popular choice for businesses and investors being so close to Central London. However, it is not immune from the slowdown in the global economy and continued uncertainty caused by BREXIT, which has caused a gradual reduction in UK GDP growth over the past 3 years. Whether to invest or expand a business is partly influenced by business and consumer confidence which has taken a big dent over the past few years.
These factors combined with disrupters such as the internet are having a huge impact upon the way we live and work and will continue to do so for many more years. The Surrey commercial property market is having to adapt to our changing world with demand for retail being affected by home delivery and for offices by cloud computing allowing more workers to work remotely. Conversely, demand for industrial/warehousing has rocketed as online shopping leads to more storage and this needs to be located close to the market you are serving. A good example of this is the Amazon Prime depot in Weybridge, or the Ocado hub in Byfleet.
2019 has seen European companies that trade in the UK, stockpiling due to BREXIT and even changing the property they occupy to achieve greater storage capacity, as they can no longer rely upon the ‘Just In Time’ delivery model that is a benefit of the UK being a member of the EU. As a parallel, there has been steady demand for industrial/warehousing space from UK firms not reliant upon EU trade, relying instead on internal or rest of the world trade. Rents for this sector have increased significantly during the past 5 years.
Where not in demand, office buildings continue to be converted to residential but that sector is cooling off due to the slow down in the housing market. Grade A corporate spec office space is proving harder to let with stock supply levels on the increase. Still those located close to excellent public transport with decent car parking are likely to fair better.
Retail continues to have casualties with Bon Marche being the latest chain to fall into administration. There is some demand for smaller shops by independent retailers due to the lower overheads but some towns are performing better than others. There has been a definite increase in the number of landlords offering retail investments for sale in Surrey, due to the increased concern over likely voids, previously unthought of when let to a chain covenant.
Established in 2010, Eggerdon & Holland Chartered surveyors is based in Weybridge and covers towns within a 10 mile radius. We provide commercial agency and lease advisory advice to landlord & tenant clients in the retail, office and industrial/warehouse sectors.