07/04/2009
The industrial and distribution sector of the Midlands commercial property market is an interesting barometer of the wider economic conditions we are currently experiencing.
Whilst the lack of commercial lending opportunities are very limited compared to a year ago, there is still activity in relation to the sale and purchase of land and buildings, although it is very much in the minority now compared to leasing activity. Good customers of banks will always be able to borrow money, albeit at a cost.
The spell of ‘negative sentiment’ needs to be addressed and the good news allowed to spread out into the wider market. Those professional involved in the market have a significant sense of frustration as there are many ‘amateur professionals’ who seem to be taken in by the fact that news they hear of which is very much speculative becomes fact when talked about second or third hand conversation.
The industrial and distribution market place is presently one which favours the brave, well funded and informed purchaser who is able to act quickly and decisively to take the opportunity of other people’s distress. Whereas 12-18 months ago, large development sites would have had a disorderly queue of would-be purchasers, it is very likely that the recent sale of the former HP Sauce site in Aston to a well-known food manufacturer probably only had a serious interest from a few purchasers with cash funds to proceed.
Those purchasers who are now buying should be smiling in the knowledge that they will in the longer term have a sound property investment. Also, those companies with lease expiries and break options should ‘fill their boots’ with the level of enhanced incentives that they are being offered, not just on larger buildings, but right across the size range.
