Outlook 2019: Commercial property sector preparing for a supply shortage
After a solid 2018 in the commercial property sector, the north has to prepare itself for a supply shortage in 2019, according to Craig Burrow, Leeds Director at Bruntwood.
Speaking at TheBusinessDesk.com’s Outlook 2019 seminar, Burrow said: “From a commercial property perspective it’s been a very good year generally. Leeds particularly is having another strong year in terms of the office market take-up. We’ve also had a great year with the completion of the Platform building in the city centre.
“We’ve seen rents rising, occupancy rising, and investment transactions have hit record highs in Northern Powerhouse cities.”
However, Burrow did say that “one of the biggest challenges” for Bruntwood going into 2019 was the “supply shortage” in the north.
As for the challenges facing Liverpool, Philip Rooney, managing partner at the Liverpool office of DLA, said: “What we don’t have here is top quality office space, and we definitely need more of it. If we have that, then Liverpool will become a far better competitor to other cities.
“This is a fantastic place to live and work, it is absolutely the place to be now, so we need to make sure companies are attracted to come here.”
Despite this, Adam Higgins, co-founder of Capital & Centric, said he believed that the success of neighbouring city Manchester would eventually begin to benefit Liverpool from an office take-up point of view.
He said said: “What Manchester has done in the last couple of years really well is attract office occupiers coming up from London, but the city is now getting to the stage where office space is going to become more and more expensive.
“Companies moving into new builds in Manchester will be paying around £36 – £37 a sq ft, whereas Liverpool is down in the mid twenties. Some businesses just won’t want to pay those rates in Manchester which means they will start to look at Liverpool.”
Tom Kelsall, partner at the Manchester office of DLA Piper, commented on the importance of keeping Manchester’s developments connected and act as part of a community almost.
Kelsall said: “The combined authority have an important job over the next several years to pull together different parts of the area’s communities and make sure Manchester continues to grow. What we don’t want is single assets out in the middle of nowhere that don’t feel connected to the rest of the city.”
Speaking of the office occupier market, Vivienne Clements, director at Henry Boot Developments, said: “We have seen a lot of success this year within the employment scheme Markham Vale. This year we have seen major decisions being made to commit to Sheffield.”
Following the success of Henry Boots Developments this past year, Clements also said they have now “gained an insight across the board” in relations to companies that take up space in studio business park developments.
She explained: “The confidence that Sheffield can take forward is that good quality mid-range companies, who can afford to buy their own building, are attracted to the area. Out of the 16 companies that we’ve brought to Markham Vale, five of those have already expanded further onto the site and one of those expanding is doubling its size just in a five year period.
“We can take confidence in that we have a really strong base and we need to nurture that base because when it comes to a recession they are the backbone that we call all resort back to.”
David Wilton, Chief Financial Officer at Sumo Digital, also spoke about the city’s growing technology sector, and the importance of using this momentum to attract other global tech companies to take office space in Sheffield.
He explained: “It it fantastic that Sheffield is becoming a tech centre of excellence. The foresight that drove the movement away from traditional, old fashioned engineering businesses to a more tech end digital city was great.
“We now need to invest more in tech, and that is about training the right people and attracting the right people to this area.”
Further coverage of topics discussed throughout the Outlook 2019 series is to follow.
Click here to see the Leeds gallery
Click here to see the Sheffield gallery
Click here to see the Birmingham gallery
Click here to see the Manchester gallery
Click here to see the Liverpool gallery