Bright times ahead in 2022 for Gatwick Diamond region

Much has changed here over the past twelve months, but there is a lot to be excited about in 2022, as Danny explains:

When you took on the role of regional managing partner, what did you want to achieve in the Gatwick region?

My initial ambition was quite simple – to ensure our regional team continued to feel supported by Vail Williams following the initial shocks of the pandemic.

I was fortunate that my predecessor, along with the wider management team, had navigated us and our clients through the first phase of lockdown. I am proud of the resilience shown by the business and our people throughout this time, thanks to our continued focus on our values and purpose.

By this time last year, it was clear that the pandemic was far from over, with further economic and social shocks in the pipeline. Our response was suitably robust, not only to meet the immediate challenges but with one eye on the future.

We were clear that supporting and strengthening our teams had to be our primary focus and, looking back, I am glad that we did, as we needed each other and our clients need us, more than ever.

As I look to the future, I will continue to build on our regional reputation, expanding our services and recruiting and retaining talent to allow us to continue to provide multi-disciplinary advice founded on the excellence of service that our clients have come to expect of Vail Williams.

Our business is people, and I will continue to build on our fantastic culture and ensure our people have the support to learn and the opportunity to grow, for the benefit of our clients.

As a wider industry, we need to continue to improve and enhance how we communicate with the market and not assume that businesses will always understand what advice they need and where to find it. Property is a complex matter, and it is down to us to provide clarity, education and good advice, without the jargon.

How has the property market evolved over your first 12 months as Regional Managing Partner and how has the firm responded to this?

The pandemic has been one of the single largest shocks the economy has had to endure.  Hopefully, one day, we will be able to stop talking about Covid and the huge ripple effect it has had on our clients.

During the early stages of lockdown, the transactional market came to a halt and, as a result, some businesses held off making longer-term strategic decisions when it came to property.

Our clients focused, rightly, on the health and wellbeing of their people and how they could operate safely, whilst considering their exposure to property occupation and its associated costs.

As a business, we focused on being there to support and help where we could. This meant that our teams, particularly in professional advisory, were incredibly busy during those initial weeks and months. For instance, our Lease Advisory team were on hand to advise on rental discussions and our Business Rates experts were able to help clients reduce their rating liabilities, sometimes to nil.

Throughout this time, it was heartening to see how quickly businesses adapted and rebounded.

By late summer 2020, the transactional market picked back up as industrial / distribution demand hit new highs. Together with an historic lack of industrial supply, this drove industrial rents up across the region.

Demand for land for industrial development and its associated land values increased exponentially, changing the landscape for last mile logistics and, in some cases, resulting in the demolition of office buildings for industrial / trade counter redevelopment.

Unsurprisingly, the office market was hit badly by the pandemic, as businesses took longer to return to the office. When they did, many required smaller, more flexible spaces. This market has been slower to recover, but employers recognise the importance of the office for both their businesses and their people.

It is too soon to fully understand the longer-term implications of the pandemic on the office market and there has been much deliberation over the future of the office. On the ground, we have seen a move towards more regional hubs, and a flight to quality as occupiers demand well-fitted, amenity-rich space.

As we all know, the investment market is driven by confidence and Covid destroyed that in 2020. Like a rush to gold, many investors sought the relative safety of long-term income with both UK and overseas money pouring into this area.

Less certain income became persona non gratia with the exception of industrial which continued to grow from strength to strength.

Over the last 12 months the market fared better than expected and Vail Williams was pleased to have conclude numerous transactions, six of them industrial, the latest being a £32.3m warehouse in Spennymore.

Despite the last-minute surge, offices, retail and hospitality continued to struggle although we forecast that 2022 will be a stronger year for all investment sectors.

What do you see as the main challenges for the Gatwick region to overcome, and how is it responding to these?

The Gatwick Diamond region undoubtedly continues to face fallout from the pandemic, with the largest single source of employment, Gatwick Airport, severely impacted over the past 12 months.

The longer it takes for this key economic driver in the region to fully recover, the further the impact on the many businesses that work directly or indirectly with the airport will be.

In the core Gatwick and Crawley area, the longer-term expansion at Gatwick and the potential additional of the southern runway still hangs in the balance, and this uncertainty continues to impact the land supply due to safeguarding.

With demand and supply in the warehouse and distribution market such as it is, wider strategic development is needed across the region, but the market needs to continue to recognise that Crawley is a key location.

For London, it remains to be seen how the City will recover and what the impact will be on commuters, particularly in light of Omicron and the renewed calls to work from home.

As mentioned earlier, we have seen an increased appetite for a ‘Hub and Spoke’ model with more agile working, where London businesses or those with large central offices, have opted for regional office hubs in the wider Gatwick region. This could lead to increased office demand into 2022, perhaps driving future development both in our town centres, and out of town.

Town centres across the Gatwick Diamond region, which were already starting to be re-shaped due to the changing landscape of retail and recent planning changes like changes to Permitted Development Rights, have continued their transformation.

This has increased the drive to re-design town centres with better mixed-use development to ensure we build new communities and perhaps new live/work spaces to meet future work patterns.

Looking ahead to 2022 and beyond, we expect to see occupiers of commercial property think a lot more strategically about their occupation, as property values and cost increases together with an increased focus on energy efficiency, continue.

This will result in the delivery of more sustainable buildings by developers and landlords, not just in Gatwick but nationally too, as occupiers seek to reduce energy costs and improve carbon emissions in line with Government targets.

What does the future hold for Gatwick as a place to locate and do business in?

The challenges currently experienced at Gatwick Airport owing to the pandemic may well be short-lived.

Gatwick Airport Ltd is progressing with the Development Consent Order (DCO) for the Northern ‘new runway’, and their plans to increase capacity will, ultimately, shape the region.

Meanwhile, wider infrastructure delivery is on the rise, with Growth Fund and Towns Fund projects in Crawley and right across the Gatwick Diamond area. This, together with the great strength in partnership working that we have seen from regional stakeholders over the past 18 months, is giving our clients confidence in the evolving market as it responds to new pressures.

Whilst the wider Gatwick region continues to struggle with the effects of property demand, supply, land allocation, delays to local plans, as well as competition between residential and commercial developers, we believe exciting times lie ahead.

The emerging Science & Technology Park at Burgess Hill is moving one step closer as we work on securing a land allocation which the inspector has just given the green light for. We look forward to seeing how this project progresses in 2022, as the scheme will provide a vital economic injection for the region over the coming years.

Our housebuilders clients also remain positive despite the supply chain challenges they have faced, and our planning and development teams look forward to assisting with the re-shaping of our region through several key residential schemes.

What do you see as Vail Williams’ role in helping businesses here to reach their full potential?

Quite simply, we want to provide good clear advice. We advise different types of clients, developers and landlords who are already in the business of property and tend to understand the property lifecycle and the importance of seeking advice at an early stage.

But we also recognise that, for some businesses who simply occupy property, professional advice can be quite reactionary – either taken when there is a problem that needs to be addressed or dictated by having to make property decisions based on a pressing need.

What we would say to occupiers of commercial property, is that professional property advice can and should play a key strategic role in business planning.

Being proactive, helping a business to adapt or grow whilst at the same time having a degree of foresight when it comes to occupational costs, is something which our teams can really add value with.

With changes in technology, personnel requirements and the increasing challenges we all face with climate change – from energy use to other environmental factors – good property advice and an understanding of our clients’ needs will be crucial as we look ahead to 2022.

We believe our expertise, underpinned by good people and supported by our culture and values, makes us ideally placed to help businesses across the Gatwick Diamond region plan for a successful future.