Investors ‘need to get real’ – property consultant
A LEADING Midlands business property consultant has called for ‘a new sense of reality in real estate’.
John Truslove, whose firm has handled commercial and industrial property transactions across Worcestershire and Warwickshire for nearly 30 years, said that while business property was picking up, there was still an unreal sense of expectation, particularly from the institutions.
He said: “We experienced more volume of business in the final three months of 2009 than in any other three month period in the last two to three years, but this welcome surge in completions has to be tempered with a note of caution.
“The completed deals have included a mixture of businesses seeking to lease or buy but it is proving harder than ever to get deals across the finishing line.”
He said that negotiations between landlord and tenant had become more difficult than at any time in the past 40 years.
“Landlords are seeing no rental growth at all and tenants are looking to economise as much as possible.
“Industrial property is tending to be worth 20 per cent less than it stands in the owner’s books and figures such as £50 per square foot for oldish second hand factories are pure fiction these days.
“There is still too large a gap between the owner’s idea of capital values and a realistic sale price and this is holding up a number of transactions involving City-based funds.
“It must be difficult for someone in the South-east to recalibrate their years of experience in rental and capital growth when dealing with the more pragmatic Midland businessman, but that is what needs to happen.
“Where institutions are under pressure to sell to release capital for investors, then they are simply going to have to be prepared to bite the bullet and find a realistic pricing level that will enable agents to achieve a sale to an increasingly demanding and sceptical marketplace,” he said.
Recent completions achieved by John Truslove include the sale of 18,560 sq ft at Units 2, 3 & 4 Old Forge Business Centre in Redditch by Fermor Properties Ltd for £690,000 to Sugarmill Properties, the sale of 10,129 sq ft at 2c Eagle Road, North Moons Moat, Redditch by BA Thorne Machinery for £350,000 to Praybourne Ltd, and the sale of a 2,281 sq ft office building at Unit 1, Centech Park, Fringe Meadow Road in Redditch by Commercial Estates Group for £197,000 to PV Wall & Sons Ltd.
