06 Aug 2014

Commercial Properties continue to perform well

Commercial Properties continue to perform well

David Orr, Associate, comments on the recent news that commercial property sales are continuing to grow. 

David Orr, Associate, comments on the recent news that commercial property sales are continuing to grow. 

The market for Industrial and Office properties has continued to perform well through the first and second quarters of 2014, with high levels of activity anticipated to continue for the remainder of the year. 

Demand is high for Industrial properties across the board as the rapid expansion of companies operating in all industries in the North East, fuelled by the current oil price, sees them outgrow existing premises and move to larger, often purpose built, industrial units.  The lack in  development of new industrial units in the region over the last 10 to 15 years means that we are seeing strong take up for second hand industrial space when it comes on line. 

We are also seeing a strong desire by oil and gas operators to relocate their operations to new build ‘Grade A’ office space. The strong demand for pre-lets means that the take-up rates for new build office space is really only down by a relative shortage of availability and the lead-in time for construction of the new buildings. 

However, as projects finally reach completion and occupiers start to take entry over the summer and towards the end of the year, the availability of the secondary office space they leave behind will be welcomed by prospective occupiers.  

The shortage of space has stifled the bargaining position of prospective occupiers and, as supply levels start to meet the strong demand, we expect landlords to seek to induce new tenants with relatively tenant friendly lease terms, something which has been missing from the market over the last few years.

David Orr, Associate


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