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Market Update

May 2012
Market Update

Even during the current economic gloom, Rowland Jones Chartered Surveyors see light at the end of the tunnel!

Despite the news that the UK is back in recession after a 0.2% contraction in the economy in the first quarter of the year, at a local level, we have experienced an increase in the number of enquiries for commercial property up by 40% in comparison to this time in last year.

A letting of two industrial units which combined offer 9,756 ft2 on a new ten year lease with in Bell Court in the Swansea West Business Park has recently completed. The landlords of the development are experienced property developers and with interests throughout the UK, recognise that current trading conditions make it more complex for businesses to make relocation and expansion decisions.  To assist companies in facilitating this difficult but necessary decision they have already delivered, in a number of locations throughout the UK, tailor-made innovative solutions that have allowed companies to expand and/or relocate without creating unsustainable pressures on the business.  This flexible approach has resulted in only one of the six units with in the development remaining unoccupied.  The new purpose built manufacturing and office units at Bell Court are constructed to a high specification, benefiting from full height roller shutter door access, a communal secure yard and on site parking. 

The office market enquiries have also been on the increase with Remploy being the first confirmed tenant to take space with in the Market Chambers development.  Market Chambers is a modern prime office developed by Neath Properties Limited and is situated in the heart of Neath overlooking The Parade.  The building is arranged over the ground and three upper floors and extends to approximately 14,300 square foot.  The BREEAM "Very Good" office space, provides a Grade A office specification which is currently achieving a headline rental of £9 per square foot exclusive. 

Following the moves by Jelf Group PLC and WBV Limited Chartered Accountants in 2011 to Swansea's SA1 development, there remains only 6,000 square foot of Grade A office space available on SA1, within Langdon House.   Grade A supply of Office accommodation has fallen to an all-time low in Swansea, the depleting supply of this prime stock coupled with the lack of any new speculative office developments in 2012 should result in landlords of Grade A buildings benefitting from possible rental growth and tightening of tenant incentives.

Conversely we are experiencing a reluctance from occupiers and purchasers to consider older stock as an alternative and I am of the opinion that the polarisation that we are currently seeing with good demand for modern fit for purpose space and generally a reluctance to consider older stock will become greater as the market improves.

In addition, the significant impact that the charging of empty rates has had on the speculative purchase of older stock will, in my opinion, cause further distortion in the future. Perhaps it is time that the Welsh Assembly Government recognised that once a building has become economically obsolete that consideration should be given to demolition of these units and the land be brought forward for the development of modern units.

NICHOLA PALMER BA (Hons) PgDip (Surv)

Tel: 01792 479845

E-mail: nicola@rowlandjones.co.uk

© Rowland Jones Chartered Surveyors

May 15th, 2012.