PODCAST: Commercial property markets may be undersupplied by 2017 unless developers start building now, Lambert Smith Hampton has warned.
Oliver du Sautoy, head of research at LSH, has highlighted an “acute” lack of quality office and industrial property in many regions, with a remaining supply “often spoken of in terms of just one year or 18 months”.
Speaking at a Hamptons International’s and LSH’s breakfast briefing this week, he said: “Developers have remained understandably cautious over speculative development. But bear in mind that a scheme kicking off now is unlikely to arrive much before 2017, by which time much of the market will be acutely undersupplied. Maybe it is a case of fortune favouring the brave.”
Ezra Nahome, chief executive at LSH, told attendees that rental returns could be 12% or more this year.
He added: “If I look around the country at the latency that exists of demand from occupiers to take good buildings, it is just not flowing through quite yet because the supply is not there.”
Du Sautoy suggested that the next 12 months could see the rise of the “alternative sectors”, with opportunities for investment in PRS homes, private rented healthcare and student accommodation.
To listen to an interview with Ezra Nahome of LSH and Nick Vaughan of Hamptons International, click below.
