Round table report: Moving parts – how the property market is changing

Our latest round table, sponsored by Eight Days a Week Print Solutions, took the temperature of the East Midlands commercial and residential property sector.

Overall, the discussion, held at the Nottingham offices of NG Chartered Surveyors, reflected the complex interplay of economic, regulatory and societal factors influencing various property sectors, with a need for adaptive strategies to navigate the evolving landscape.

Lance Hill managing director of Eight Group kicked off the conversation. His company is going through a lease renewal.

He said: “It’s the first time I’ve been through this process as a business owner, and it’s been interesting. I’ve head positive dialogue with my landlord and I’m learning fast. It’s a case of: so far, so good!

Thomas Szymkiw, head of agency at NG Chartered Surveyors, explained how quickly the market had changed in recent times.

He said: “Since the pandemic things altered drastically in marketplace. Most companies are still operating a hybrid working approach, and not a traditional office set up at the moment. Funky fit-outs are where it’s at, and with this rents have increased to around the £24.50 per sq ft. The office sector is different market to what it once was.

As for industrial property; that’s really kicked on due to the increased demand for distribution and storage space brought about by the online retail boom.

Chris Carlisle of Decorum Estates agreed that the industrial market continues to boom – and that taking new warehousing space can actually save a company money in the medium term.

Turning to the office sector, he said: “It’s all about quality, quality, quality. Business owners now, more than ever, are concentrating on attracting the best quality staff; they’re going the extra mile to get the right people – whether that be through extra amenities, location or high-end fit-outs.”

The property environment is “more challenging”, according to Jinny Yang of the JYD Group.

She said that the cost of finance has risen and that while construction costs are falling, margins are getting squeezed.

She added: “We’re seeing overseas buyers pulling out from residential market as residential yields are almost zero. Developers need to be looking at more creative strategies.

“Having said this, there are lots of moving parts. Overseas investors will return to the UK as it’s still seen as a safe environment. Traditionally, they’ve looked at London because the market is so unique – but the Midlands is more attractive from a yield point of view.

Adam Kingswood from Kingswood Residential Investment Management agreed with the “moving parts” piece.

He said: “We’re seeing a lot of build-to-rent (BTR) schemes that are mostly pension fund-owned, but there is some overseas investment still coming in.

“My concern is that most BTR stock is aimed at students – we need more professional blocks. Our biggest issue is supply and so rents are running away at an unaffordable rate at the moment.

Paul Hinchliffe of Nelsons pointed to a malaise in Nottingham’s planning system for the lack of stock coming forward. He said: “Agents are struggling to complete on simple deals. This could be down to a loss of expertise in the city council.”

Nottingham City Council’s planning department is short of staff, said Nick Grace of Grace Machin.

He added: “There are some officers in council that have been there a long time. There are a number than are quite proactive, but in a broader sense they are under resourced – there is an undersupply of planning officers, but this is a countrywide problem.

“Overall, the planning environment is incredibly difficult, but it probably always has been in terms of a rapid response to planning applications. The level of information to support a planning application is now way more than it was five, 10 or 20 years ago. I’ve never woken up with nothing to do that day…”

Jenny Clarke of Tungsten said: “We’ve got 10 sites at the moment – two been in planning for over a year. It’s got to a point where we’re sending barristers letters – and that can cost a lot of money. What planning departments don’t grasp is that three months deciding on a planning application can add another nine months to a project – by which time market dynamics may have changed.

Szymkiw said that council planners, on the whole, are “not as commercially-minded as the private sector”.

Clarke added: “They’re also massively under-resourced. We’ve had some local authorities which have outsourced planning decisions.”

Hill said that he own particular deal on the Eight Group offices had been smooth, but could’ve been quicker. However, he said, that’s often down to business owners juggling a lot of balls.

When asked if what demands tenants were putting on agents, Szymkiw said: “We’re often asked ‘Why we can do it sooner?’ I one hundred per cent understand the frustrations. We’re the middle men and women who have to keep the deal going; it can be frustrating.”

Carlisle reminded the panel that agents are remunerated on success, unlike on other players in a deal. You are remunerated on success – a lawyer isn’t.

Szymkiw replied: “We can only bill once the deal is done. That’s why it’s do rewarding to get things done.”

Talk turned back to the boom in the industrial market – and whether it’s sustainable.

Clarke said: “If we go back to pre-Covid times and the first few weeks of the lockdown, then it was very quiet for few weeks.

“Then, all of a sudden it went boom.”

“Now, the sector has changed. Occupiers are more ESG-driven and what’s coming through the market are smaller units. My company is going down to mid-box units again. We have and will continue to speculatively build.

Szymkiw said that at his end of the market, NG is advising landlords that they need to invest in their industrial portfolio to attract the best tenants.

Nick Grace said that Covid was the biggest social and economic change we will experience.

He added: “The world literally changed overnight.

“For Nottingham, my view is that the city centre, pre-Covid, had a much broader mix of people in it on a day-to-day basis. Walking through the Old Market Square at lunchtime nowadays you don’t see many people wearing a suit jacket. The professional dynamic has withdrawn from the city, and with it the spending power. We have to get people back into the city centre.”

The panel were asked whether, with this in mind, that they thought that the city centre office market is dead?

Szymkiw didn’t think was dead, but that it has changed, with Carlisle agreeing, adding: “Demand has structurally changed.”

Hinchliffe said it had dawned on business owners that they don’t need the standalone statement offices anymore.

He said: “Businesses have realised they don’t need all the space they had. We’ve been no different in this regard.”

Grace said that, in terms of the office market, people need to feel like they want to be in town.

“Nottingham needs to solve its image problem because, at the moment, the way its people feel about the city makes investment very difficult.”

We rounded off the discussion with a talk about the future.

Hill said that his company has tripled in size in last four years and space was becoming a headache. He added: “Then came the pandemic and some of our staff started working from home. When they came back we realised it just too expensive to expand. We looked at buying – but the mortgage was too expensive. The space we have now is big enough to grow into. What we’re trying to do now is futureproof it.

Szymkiw added: “From an office sector perspective we know where the market is going. We have to advise clients on what they need and while many tenants have already moved into offices they want, a lot of landlords are stuck in pre-pandemic mode. That has to change.”


Lance Hill, Eight Days a Week
Thomas Szymkiw, NG Chartered Surveyors
Jinny Yang, JYD Group
Adam Kingswood, Kingswood Residential Investment Management
Chris Carlisle, Decorum Estates
Jenny Clarke, Tungsten
Nick Grace, Grace Machin
Paul Hinchliffe, Nelsons

Chair: Sam Metcalf,

Key takeaways:

  1. Industrial Space and Cost Savings:
    • There’s a need to find new industrial spaces while also saving money for businesses.
    • Quality and constant demand are emphasized.
  2. Attracting Staff with Amenities:
    • The discussion included the importance of amenities and break-out areas for attracting and retaining staff.
  3. Environmental Challenges:
    • Environmental challenges were noted, with finance costs rising and margins getting squeezed in construction.
    • Overseas buyers are pulling out from the residential market, leading to almost zero residential yields.
    • Developers are urged to explore more creative strategies, with opportunities still present in the UK market.
  4. Build to Rent (BTR) Sector:
    • Build to Rent (BTR) sector was discussed, with a focus on the shortage of supply leading to unaffordable rents.
    • There’s a need for more professional blocks in city centres and suburbs.
  5. Planning and Regulatory Issues:
    • Challenges with planning applications were highlighted, including under-resourced city councils and delays in decision-making.
    • Planning processes were described as more regulatory and demanding compared to previous years.
  6. Impact of COVID-19:
    • The COVID-19 pandemic significantly impacted the market dynamics, with changes in demand and occupier behavior.
    • The perception of city centres, such as Nottingham, has shifted, with a withdrawal of the professional dynamic and spending power.
  7. Office Market Shifts:
    • The office market has changed structurally due to the pandemic, with businesses realising the need for less space.
    • There’s a focus on making city centres more attractive to encourage people to return.
  8. Space Utilisation and Expansion:
    • Companies are re-evaluating their office space needs, considering factors like cost, expansion, and remote work.
    • Expanding and buying space are seen as expensive options, leading to a re-evaluation of existing spaces.
  9. Legislation Concerns:
    • Concerns about legislation and its potential impact on the sector were raised, particularly regarding social housing and rushed legislation before the General Election.
  10. Future Outlook:
    • There’s a consensus on the need for clarity and certainty in decision-making, with a focus on sustainability and cautious deal-making.


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