Twenty-Ten Vision

After packing away the Christmas decorations for another year and hopefully still keeping a few of our New Year resolutions, we all look forward to what the New Year will bring for the commercial property market in 2010.

The optimists among us will be heartened by the increasing activity in commercial property across the UK in recent months with the strongest rise in activity being led from London and the South East.

Sentiment closer to home in the South West region is also positive with many agents reporting increased market activity, albeit from low levels, and signs of developers gearing up to enter the market more strongly in the year. The amount of vacant sites has appeared to level off which again is an indicator of improving (and not worsening) economic conditions.

Large infrastructure projects in the South West will also support the market in the medium to long term. The planned development of Hinkley Point C power station is likely to result in significant economic growth in Somerset and the South West for many years.

On the downside, agents remain concerned with the continuing funding difficulties being experienced by businesses in terms of both cost and availability. Cash-rich bargain hunters are around but many are struggling to find deals to do because of limited distressed sale opportunities. Improvement in the funding situation will underpin the steady improvement in market activity throughout 2010.

It is fair to say that the overall expectation for the year is one of a gradual improvement in the commercial property market with a general pick up in activity. There still remains some volatility and uncertainty in the market. A possible change in Government in the year may contribute to the general uncertainty for business and markets generally. However, provided the banks are willing to re-engage fully with the regional economy then a year of steadily improving trading conditions can be anticipated with some confidence.

As the UK moves hopefully out of recession, difficult trading conditions will continue for some time. Businesses that intend to either sell or buy commercial property and also landlords and tenants moving their premises or facing lease renewals and rent reviews in the year will benefit from timely legal advice on their plans.

Published: 18 December 2010         Author: Nick Dell, Head of Commercial Property