End of property slump in sight, say experts
Times may be getting tougher for Birmingham’s commercial property market – but there is light at the end of the tunnel, experts at property consultancy Atisreal are predicting.
Research presented at Atisreal’s economic review seminar in Birmingham looked at the current position of the Midlands property market and examines the economic drivers that will shape performance over the next 12 months.
While the results show that the downturn will continue across all sectors until the end of 2009, Birmingham can expect to see a return to capital growth by 2010.
Tim Suffield, head of Atisreal’s Birmingham office, says that, despite the struggling economy, there are areas within the regional market that continue to fare well.
Office take-up figures for the first half of 2008 in line with the long term average, with roughly 570,000 sq ft of space having been committed to in the first six months.
Mr Suffield said: “The main headline rents have remained relatively firm and for the first six months of this year occupier demand has held up well in both office and industrial sectors.”
There is little question, however, that the continued health of the city’s office market will require underpinning by a number of transactions from existing large corporations within the city, with long-term space strategies to encourage inward investment.
Atisreal also admits that the industrial sector has a difficult time ahead.
Void holding costs have risen by 25 per cent in the past 12 months as energy costs drive service charges and the impact of the abolition of void rates bites.
That said, manufacturing is faring well, with UK companies winning back business which should help to offset some of the negative changes affecting the industrial sector such as void rates and increasing fuel costs.
Mr Suffield said: “While it is impossible to escape the daily doom and gloom appearing in the media, let us not lose sight of the fact that Birmingham and the West Midlands as a whole, remains a region under transformation and is unlikely to be hit as hard by the current economic climate as London.
“Much-needed funding has been secured to transform New Street Station and to expand BIA, and the city continues to undergo massive alterations through schemes such as Snow Hill, Masshouse and Edgbaston.”