It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Jason Hercock, Andrew McFarlane Holt and Trevor Wells, directors at Chartered Surveyors and Property Consultants, Wells McFarlane, who present their views on the future of the office, industrial and land markets in 2023…
“It’s unlikely the office market will experience much variation from the past 12 months; the old adage of the high-quality properties attracting interest and tenants will certainly remain true,” says Jason. “This is not only compounded by a shortage of labour and skilled people, but also the rising costs of fuel and living impacting on the workforce’s willingness to commute. Offices in accessible locations with good transport links such as rural market towns will be the most desirable, followed by those on city perimeters or semi-rural locations.
“From a landlord perspective, perception is critical. There’s an oversupply in the market so premises that are modern, energy efficient, flexible enough to facilitate hybrid working, and located in a well-connected environment that stimulates creativity and productivity will be the most in demand, so it’s advisable to talk to your agent about how best to market your property. I’m also starting to see a pleasant rebalancing in terms of freehold office space. Pre-Covid, there were very few available but with the changing interest rates and working patterns, an increase in freehold supply is emerging that could offer businesses alternative options next year,” concluded Jason.
The demand for modern, high-quality units looks set to be the same in the industrial sector, as Andrew explains. “The better quality, thermally efficient buildings, like the Net Zero ready one at Hinckley Park we’ve just launched for IM Properties, will always hold their value and be well sought-after despite market conditions. We must expect the general uncertainty to be reflected in tenant enquiry levels, but in any recession there are still businesses up- and downsizing, meaning activity in the market. In certain areas, and on certain properties, I anticipate corrections in prices will be needed – tenants will be looking for deals and this will be the primary motivation for relocation – but the Midlands boasts excellent transport links and a strong labour pool, so is in a positive position and deals will continue.”
On the land side, despite the announcement from government that housing targets will not be mandatory, there will still be pressure on the housing market, and therefore land supply. Trevor says: “Development land is already in short supply, and these changes are likely to make parcels even more scarce so I expect competition for consented sites will remain strong. The knock-on effect of course is that this likely lack of supply should sure up land prices, and hopefully as we see inflation fall back and interest rates stabilise, mortgage lenders will offer more competitive rates which should once again see sales rates of new homes start to pick up. Getting on with the strategic promotion of land will be more important than ever given the proposed changes to the way local authorities will have to deal with their housing supply numbers, so those with land which may have potential are advised to seek advice or a no obligation appraisal.”
