Demand for space will remain stable in 2001, despite stock market volatility and high redundancies adding an element of caution to property market expectations, according to Baring, Houston & Saunders’ Corporate Property Forecast 2001.
Christopher Tabor, director of corporate real estate at BH&S, said: “It is interesting to note that the UK economy, as the source of uncertainty in the marketplace, is forecast to undergo only a relatively mild slowdown, which in our view would not result in a dramatic reduction of demand for space in the long term.”
However, the technology, media and communications slowdown has caused several high-profile companies, such as Motorola and Cisco, to scale-down their requirements, which has in turn caused a slackening of demand.
The report said that in the office sector the slowdown was most affecting the Thames Valley, because of the substantial number of hi-tech company occupiers based there. One agent told the report that requirements are down by 50%. “Vacant buildings, that were seeing 20 viewings a week, are now down to three or four inspections a week,” the report states.
The report also highlighted the industrial and warehouse sector as another area for mild concern because demand is outstripping supply. “Generally there has been a notable shortage of new buildings, with well-located and specified speculatively developed buildings letting quickly.”
The retail sector is strong though, despite the collapse of several stores including Ciro Citterio, Save and the Past Times chain. “Small units, less than 600 sq ft in busy locations, are still experiencing heavy demand from coffee shops who are often prepared to make premium bids,” the report said.
Also doing well, according to BH&S, are the regional office markets: “Markets such as Bristol, Birmingham, Leeds, Manchester and Glasgow are very active and there is no obvious slowdown in activity.”
EGi News 21/06/01
