Developers in key towns are reviewing unimplemented planning consents and assessing opportunities close to town centres so as to enhance planning prospects. The increasing flexibility in occupational requirements is also being translated to existing retail parks where tenants are being offered a greater number of subdivision and extension opportunities. In addition, an increasing number of retailers are exploring the benefit of installing mezzanine floors to assist trading returns.
Making a valuation of your property is not a straightforward occupation, there are few segments that raise the expense and there are certain components that diminishing the value. On the investment front, total returns for UK Retail Warehouses rose from 16.8% to 24.2% for the year to March 1998, but the biggest improvement was evident on the Retail Parks sector which rose form 18.9% to 31.8%. The Yanks are coming – according to the latest inward investment enquiry figures recorded by InStaffs, the organisation charged with attracting new investment into the county. Latest figures from InStaffs show that of the 48 overseas enquiries received during the three months from January to March, 34 of them were transatlantic, while nine came from Europe and four from the Far East.
Whilst the enquiries are very much across a wide range of industries and businesses, there is a pattern emerging of USA companies wishing to establish labour-intensive call centres for major telesales and support administration centres, said John de Kanter, InStaff,s’ Chief Executive. Stoke-on-Trent continues to dominate the number of enquiries, again retaining its share of approximately a third of the 262 incoming calls for land and property. Stafford itself has also maintained its increase in interest, possibly as a result of the new developments such as Mid-Staffs 14 and the Staffordshire Technology Park, said Mr de Kanter.
He said that there was still a variance across the county in terms of the availability of property. There had been a decrease in industrial property in the south of the county, but this now appears, overall, to have been reversed. The most popular set of property/site details issued by InStaffs between January and March was Stoke-on-Trent’s Fenpark Industrial Estate which is a range of interlinked buildings with units ranging from 2,221 to 5,140 sq ft, available separately or as a whole (19,885 sq ft). These details were sent out in response to 56 specific enquiries. Occupier property demand is expected to remain strong for much of 1998, as employment growth is maintained at a relatively high rate. However, the anticipated economic slowdown over the next 12 months is expected to be more severe than in 1995196 although much less severe than the recession of the early 1990s (or early 1980s or mid 1970s), and this will affect occupier demand in 1999 and 2000 reveals GVA Grimley’s latest research document entitied ‘Economic and Property Market Review.
How marked the economic slowdown will be over the next 12 months is debatable, the OECD recently forecast growth of only 1.7 per cent this year and 1.8 per cent next year, whereas a week later the IMF produced figures of 2.3 per cent for 1998 and 2.1 per cent for 1999.GVA Grimley expect economic growth to bottom out at a below trend rate in 1999, employment growth and occupational demand in 1999/2000 and rental growth in 2000/2001 at a figure close to zero.The current regional rental growth pattern is now familiar with growth much higher in London, and to a lesser extend the South East, than elsewhere, reflecting strong economic growth and low floor space availability in all sectors.
Stuart Morley, Head of Research, summaries the situation as follows, At present occupier demand is strong and rental growth is increasing in the property market. The magnitude of the anticipated property market slowdown when it comes will in part be dependent on the extent of the economic slowdown but also the extent of development activity which the present upturn generates. The danger is that strong rental growth this year will trigger a widespread development boom with the consequent problems of oversupply. However this seems unlikely due to the expected slowdown in occupational demand next year, although development activity is already at very high levels in some sectors.
General Accident Life Assurance Ltd and Capital & City plc have signed recruitment consultants GKR as their first tenant at Queensberry House, Old Burlington Street, Mayfair. GKR has taken the entire 1, 148 sq m (12,359 sq ft) fourth floor close to the asking rent of £54.00 psf, on a 15- year lease and a market rent-free period. The 6,199 sq m (66,725 sq ft) Queensberry House, which has the biggest floorplates in Mayfair, has just reached practical completion.FPD Savills represented GKR. Quoting rents are £54.00 psf for the first three floors and £58.00 psf for the fifth floor.
GKR has simultaneously assigned the leasehold interest held on their former building at 32 St James’s Square, SWI, expiring in July 2009 with a passing rental of £387,500 per annum exclusive.A substantial reverse premium was negotiated. FPDSavills represented GKR and the assignee was represented by Ashwell Rogers.
United Friendly Insurance plc has acquired Asda Stores Group’s regional distribution unit on Southmead Industrial Park, Didcot on a sale and leaseback.A figure of just under £15 million was agreed for the 20,668 sq m (222,468 sq ft) unit, representing a net initial yield of 7.25 per cent, off a rent of £1,130,000.United Friendly was particularly attracted by the strategic importance of Didcot as a distribution centre, coupled with the appeal of the 30 year lease offered by Asda, which has the option to extend it for a further five years.
Pegasus Park is being funded by Associated British Foods Pension Trustees Limited who are advised by Fund Managers, Dixon Studd. Construction has started on the second phase which has been pre-let to Parker Merchanting Limited (20,000 sqft / 1,850 sq m) and C Brewer & Sons Limited (5,000 sqft / 4,645 sq m) both units incorporating trade counters. Combined rents total £175,000 pa equating to £7 psf (£75.35 p/sq m). The final third phase of 25,500 sqft (2,369 sq m) is now being marketed at a rent equating to £7.25 psf (£78 sq m) and benefits from BIC, B2 and B8 uses.
Parker Merchanting Limited were represented by Healey & Baker and C Brewer & Sons Limited by DTZ in the letting of Phase ll while Central & Provincial Properties limited were advised by Stiles Harold Williams. At the point when discussing Business Property Depreciation, you are not alluding to the estimation of the real land, yet the loss of worth to the building because of the regular wear and tear, physical crumbling and age that happens over the long haul. Leading commercial property consultancy, Nelson Bakewell has been selected as the UK representative of ONCOR International – one of the world’s largest organisations of real estate advisers.
ONCOR International comprises 6,000 professionals covering 220 markets in more than 45 countries. The association provides its members’ clients with the optimum combination of global coverage and local real estate expertise. Last year the ONCOR system generated approximately 670 inter-company transactions worth around US$900 million. Since Nelson Bakewell was created in 1982, the firm has focused exclusively on the domestic market and has become one of the foremost prove ‘ders of property advice in the UK. However, as real estate markets develop on an increasingly global basis, it is now appropriate that we have effective links with comparable organisations on an international basis.