Member Article

2018 Predictions: Yorkshire Commercial Property

Eamon Fox: partner with Knight Frank in Leeds and head of office agency

“£30 psf will be the new headline rent in Leeds during Q1 2018 and will become the new norm for Grade A. Net absorption of office accommodation will continue to increase and, due to a limited development pipeline at the moment, there will be a pinch point on availability.

“The continued growth of tech firms will emerge and will account for 30%+ of our market on 2018. We will see a continued blurring of the lines between corporate and tech firms, as they merge and breed and a new species of firm is conceived.

“2018 will be the year of the refurbishment, as there is no new build coming through, but there are some very well-placed high-end refurbishments.

“We can expect “disruption” in the sector as new and more agile property firms enter the market. We are working with many in the millennial generation, a generation which has been as publicly reviled, praised, misunderstood and analysed. Millennials, also known as Gen Y or those born in the 1980s and 1990s, are fast becoming the dominate elite, they have ideas which cause disruption in many sectors and are coming fast.

“2018 will also see the rise of the ethical firm. Led again by the millennial generation, we will see more property transactions support a wide range of charities, social enterprises and small local organisations through the provision of modern, affordable and flexible workspace. The lines will be blurred as corporate meets social.

“We will see at least one new “rockstar” tech firm open in Leeds, on a par with Uber, Tesla. Etc. And we will have fun.

Jonathan O’Connor, director with leading Yorkshire property consultancy Walker Singleton, who have offices in Leeds, Bradford, Halifax and Huddersfield.

West Yorkshire Industrial:

“We will continue to see issues with the low level of available quality stock and a high level of occupier demand. The lack of land being made available for employment development over residential will be more acute in 2018.

“Meanwhile more occupiers will consider design and build to satisfy their needs as availability continues to be an issue. And, although certain sectors may struggle due to Brexit uncertainties, the majority of the West Yorkshire market will be resilient and continue to see steady growth.

West Yorkshire Investment:

“Property will continue to be seen as a good investment category and return compared to other sectors. Investment yields on long-let properties will remain particular strong with investors looking for longer terms to ‘ride out’ any market changes which may occur in the shorter term. 

“Investors will be particularly wary of high risk, such as significant voids and upcoming capital expenditure, and this will be reflected in achievable prices.”

Simon Dove, partner with Leeds property consultancy Dove, Haigh, Phillips.

Yorkshire Industrial during 2018

“There will be a reduction in supply of existing units, freehold and leasehold of all sizes.

Speculative builds of all sizes will become more prevalent.

There will be upward pressure on rents and prices, with values steadily rising for well-located industrial land

David Brackenridge, partner with Leeds property consultancy Brackenridge, Hanson Tate.

The commercial property market in general hates uncertainty and unfortunately Brexit provides just that – will it be positive or negative. So generally I perceive people will be risk-averse and caution will prevail. Hence, volumes of transactions could fall in 2018. However, with caution there comes opportunity and the brave investor or occupier may well benefit from falling competition.

The industrial market. The current under supply of industrial will continue to drive rental growth but occupiers will be cautious because of Brexit which will restrict transactional activity. Investors with existing portfolios will benefit as tenants will be reluctant to move may be taking over-spill accommodation as a stop-gap rather than a large relocation. The M62/M1 corridor will continue to be the focal point of the Yorkshire Industrial market.

The Office market. Leeds City Centre will continue to dominate as companies seek to relocate from surrounding towns, suburbs and business parks, attracted by the facilities and infrastructure offered by the City Centre, both for the company and its staff. The take-up of secondary offices for PDR, conversion to residential will reduce supply within office markets and should drive rental growth.

This was posted in Bdaily's Members' News section by Robert Beaumont .