Curchod & Co’s Nick Reeve talks about the commercial property market recovery
Curchod & Co’s Nick Reeve talks about the market recovery and expanding the business during the pandemic
With the onset of the pandemic and an unprecedented national lockdown, 2020 was an incredibly challenging time for the commercial property market, both nationally and locally.
Back in March 2020, as we were all told to stay at home, transactions, with a few exceptions, ground to a halt almost overnight. While the transaction markets have now recovered to a greater or lesser degree, Covid-19 has brought about changes that will continue to impact the market for many years. The way we work and our relationship with the office has changed. The way we shop has also changed over the last 18 months, with an acceleration of online retail resulting in a surge of demand for logistics properties.
As an industry, the commercial property market has always been adaptable and had an ability to adapt and react to the changes in the occupational demands of businesses. I am sure that as an industry we will, once again, rise to this challenge.
During the most difficult months of the pandemic, the Curchod & Co team took stock of the situation and gave much time and energy looking at how we should respond to the unfolding situation and consider how the business would be best placed to rise to this challenge and the inevitable opportunities that would be presented to us across the South East as the country emerged from lockdown.
With existing offices in Weybridge, Woking, Farnham and Camberley, we decided to look at expanding our operation further afield in the south-east and began a discussion with a friendly rival, London Clancy.
The London Clancy brand and reputation is well known across Hampshire, and beyond, and while the two businesses had a slight geographic overlap in terms of the local towns and markets that are covered, London Clancy’s offices in Basingstoke, Camberley and Winchester meant that the team’s area of operation stretched further west to include other key business locations such as Andover and provided coverage in the A303 and A34 markets of Hampshire and West Berkshire.
We saw an opportunity to bring the two businesses together to provide clients across the region, from the south coast to London, with greater market exposure and the experience of an enlarged team of recognised experts.
A deal was agreed, and in April 2021 Curchod & Co announced the acquisition of London Clancy, bringing together two of the best-known names in central-southern England’s commercial real estate market.
Since then, we have seen the easing of the Covid-19 restrictions and the two firms have reported a significant increase in market activity. Enquiries and viewings have been increasing daily, and our websites have been showing an increase in traffic, month on month. As the economy has begun to emerge from lockdown, the industrial and distribution sector has been the strongest market sector, with the enlarged team seeing a marked increase in activity up and down the south-western corridor.
In the southwestern quadrant of the M25, there are a number of new industrial schemes becoming available, which are likely to let well due to the level of demand. Further south and west into Surrey, the limited availability of industrial and logistics space means there is upward pressure on rents.
There has been unprecedented rental growth in the industrial sector across the Blackwater Valley towns of Camberley, Farnborough, Fleet and Aldershot, over the last few years, and annual rents are now approaching £14 psf. With the even higher rents being seen closer to the M25, this trend is anticipated to continue and there is clear evidence of companies moving away from London as they chase value.
At the same time, the rental and capital growth within the market has led to a significant amount of obsolete office accommodation being considered for redevelopment to industrial and warehouse uses. With good access to the M3, there is currently strong evidence of this in the Fleet and Hook area. At the same time, in Farnham, the sale of the investment of three well-let industrial units on the Farnham Trading Estate, at highly competitive yields, illustrates the confidence that investors have in this market sector.
Further west, in the Basingstoke, Andover and Winchester markets, the supply of stock has been boosted with new developments in Basingstoke, including St Modwen Park, and activity levels have been high throughout the pandemic. With levels of demand remaining high, and a number of properties becoming available for occupiers, it is expected that the market will remain strong in the long term. As this part of the south-western corridor still provides good value for money compared to other locations, which have lower levels of availability, it will continue to attract a wide variety of businesses involved in manufacturing, storage and logistics.
While the recovery of the industrial and distribution sector has been ahead of the office and retail sectors, it is clear that the market in the south-western corridor is responding well to the demands of a post-covid world and this all suggests that the combined Curchod & Co / London Clancy business is ready to assist our clients in taking advantage of the opportunities presented.