MIXED MESSAGES

 

After a long and quiet summer period in the commercial property market, there are one or two signs of those “green shoots” which the Government and certain economic commentators would have us believe are emerging.

 

The ‘transactional’ investment market does seem to have stabilised - values have plateaued and reports are emerging of a lack of decent quality stock again.  Essentially this is likely to be a reflection of existing money and pent up demand chasing the well let, more secure investments.  It will be intriguing to see how secondary stock performs in this sector over the remainder of 2009.

 

Occupier demand for office and industrial space is also showing some early signs of what is hopefully a revival - perhaps mirroring the general state of the economy at present?  Currently, the activity is largely limited to the lettings and sales of smaller product, but we have to start somewhere.

 

In particular we are pleased to report that BDT have been instrumental in introducing Crouzet Ltd to Unit 8 Cedarwood on Chineham Park.  Chineham’s owners, MEPC UK Ltd, have concluded direct discussions with Crouzet as a result of our initial introduction/ brokerage.  The deal is one of a handful on the Park this calendar year, and over the previous 12 months we ourselves have let space on the development on behalf of outgoing tenants, to the likes of UKN Group Ltd, Sperian Ltd and Allpoint Packaging Ltd - all significant players in their respective markets.

 

However, these signs of possible improvement are nothing more than early indicators against the overall backdrop of continued uncertainty and the general consensus that the UK economy is facing a tough recovery.  Growth is forecast to be “fragile”, consumer spending is likely to remain tight, the spectre of unemployment still looms and Government cuts in capital programmes are inevitable.  Businesses will continue to focus on cost containment, outsourcing, hot-desking and home working, with the inevitable impact on demand and supply.  All in all, not the ideal circumstances for cultivation of those “green shoots”!

 

BDT remain very much live to these factors.  We continue to run a tight ship with cost containment in mind, and will react and adapt accordingly to the challenges set by the market for the remainder of this year and next.

 

 

 

 

 

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23rd September 2009

Contact for further information: Richard Thomas

Baker Davidson Thomas

E-mail:  richard.thomas@bdt.uk.com

01256 840 777