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commercial property solutions
It is certain that all of us as individuals and businesses have great expectations and hopes for 2015 says commercial property agent Prop-Search.
On the face of it, 2014 fuelled these expectations with a glimpse of improvements in activity and growth in the economy, leading to a more positive outlook on life and a growing feeling of confidence.
All of these emotions are of course laced with nagging feelings of caution, and rightly so. Some have benefited from the recession but the hope now is that everyone will begin to see an improvement in opportunities.
Simon Toseland, a Director of Prop-Search, said: “We reported last year on the resurgence in new commercial property development and we will see speculative development in 2015 - the first in around 10 years. This will initially be limited to prime locations and more than likely, off the back of deals where pre-lets / sales have helped reduce the risks of the ‘bigger picture’.”
However, despite the obvious imbalance between supply and demand and a more positive outlook on life, Prop-Search warns that some companies remain cautious about making the jump and committing to expansion, whilst many are held back by the fact that they need to compromise - possibly having to consider a building that isn’t perfect for them or isn’t in the exact location that they want.
Simon Toseland adds: “It’s ironic that for some, the shear lack of choice in existing stock is holding back their move, whilst most developers have generally remained cautious about building. The one element of the equation that could help both sides is the availability of money and that looks likely to change at last.”
The retail banking sector has not engaged in meaningful lending on commercial property - it might purport to have been lending but in our experience it was rare and more often than not came with some pretty onerous conditions. Of course, it would be irresponsible for lenders to start throwing money around but unlike the residential lending markets - which themselves are undergoing more restrictive lending parameters, hence the slowdown in mortgage sales - the almost complete lack of lending on commercial property has been a real problem for businesses and genuinely held back the market.
Commercial property lending is safe when everyone involved gets the right advice and understands the variables - the problem has been that banks simply didn’t want to explore commercial lending opportunities. As such, much of the commercial development undertaken to date has been limited to those with the resources to fund it.
However, there are signs now that the banks are about to come back in to the market and from the conversations we’ve had with a few of them, it is clear that some of them are concerned that they don’t get left behind with competing banks ‘stealing a march’ on them.
So 2015 promises continued growth – let’s hope that it delivers.
Further information or advice can be obtained from Prop-Search - Tel: 01933 223300 / 01604 492000 or its website: www.prop-search.com