Our very own Darron Owen has been in the press this week, focusing on the effect of the political landscape on the property sector within the Midlands. The piece for the Derby Telegraph highlighted a number of opportunities and risks within the industry for readers.
Read below to find out Darron’s outlook for 2017:
Judging by recent conversations many were pleased to see the back of 2016. But despite the upheavals and economic uncertainty of last year, we predict that 2017 will be one of innovation and prosperity here in the Midlands.
In the Autumn Statement at the end of last year, the Chancellor promised £392 million to grow the economy and create jobs here. As part of its ‘Midlands Engine’ policy, the money is earmarked for housing, training and transport improvements. The year ahead will be a critical one in understanding how that investment will be delivered, and how quickly.
That’s not to say that economic uncertainty won’t continue in the region. The formal Brexit negotiations, still scheduled to start at the end of March, are likely to herald some disquiet among parts of the business community. Expect to see a relatively quiet summer period, as we wait for greater clarity on issues such as access to European workers and the shape of the UK’s trade deals ahead.
But uncertainty is not necessarily always a negative force. In the commercial property world financial uncertainty can bring about increased investment as funds choose the stability of bricks and mortar over more risky asset classes such as equities, currencies or commodities.
In the Midlands, we benefit from the fact that our commercial property market is largely a stable one, offering a variety of secure assets in which to invest.
For international investment particularly, London has always been the default market within the UK, but investment opportunities in London tend to be more speculative in nature and attract a higher price tag. Our part of country, on the other hand, provides investors with traditional, sensibly priced property investments with long leases, as well as interesting opportunities to invest in the public sector which is less susceptible to market fluctuations.
Furthermore, the rise in internet shopping has increased the need for warehousing, particularly in the Midlands where our central location and transport links put us literally at the centre of the market. The Construction Review & Forecast 2017 prepared by research organisation Glenigan in November last year reflects this, identifying that industrial starts in 2016 were stronger than in the London area (9% in the East Midlands and 14% in the West Midlands). We predict this trend to continue in 2017.
The fact that Trident Building Consultancy’s Midlands office has recently been involved in acquisitions of circa 1.5 million sq ft of property on behalf of its clients in the Midlands area alone demonstrates that the economic future is not as dismal as was feared immediately following the Brexit vote. And for companies such as ours, it’s not just our building surveying team that are kept busy: when the investment market is active our other business areas such as cost and project management services gain from the knock-on effect.
Trident recently advised on the £6.05M acquisition by Newcore Capital Management of the prime, three-acre site on the corner of Traffic Street and Siddals Road, opposite the Intu Derby shopping centre. The site, which previously had planning consent for 550,000 sq ft of offices and hotel accommodation, could be regenerated to provide a significant mixed-use scheme, featuring predominantly urban living.
While political uncertainty continues to dominate the headlines, Derby and the surrounding area has huge economic potential, which is great news for both inward investment and job creation.
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