Predictions for 2017: UK set for growth in office and retail offering according to Sanderson Weatherall

HERE Sanderson Weatherall partners Peter Heron and Richard Dunn discuss the highlights of 2016 and what they think the future holds for their respective markets in 2017.

Partner Peter Heron is a specialist retail agent.

What have been the biggest changes in your industry for 2016?

Not really a 2016 change but the loss of BHS and a number of other large store occupiers has increased void floor space in a large number of town and city centres. In the more thriving locations, such as Leeds, these will be either taken up by others or split up by proactive landlords and so many see this as an opportunity.

One trend we have seen in recent years is the expansion of the leisure industry and its move into what were traditionally prime retail locations. This has been driven by the increasing voids in city centres being taken up by restaurants and cafes and Leeds is a perfect example of this.

We have already seen numerous new restaurants opening in the likes of Trinity including the highly successful Trinity Kitchen. Outside of the scheme Bond Street is becoming a new leisure location with 200 degrees coffee having just opened and Thai restaurant Busaba Eathai opening in the former Lloyds Bank. In addition Loungers and Cosy Club will be opening in the former Next Store at the corner of Bond Street and Albion Street.

What has been your highlight for the year?

In Leeds it was probably the sale of the Matalan Investment in Lower Wortley. This attracted considerable interest driven by the lack of available stock generally and increased interest in the regions due to a lack of supply in the South East. This was purchased by an overseas fund on confidential terms.

What will be the biggest changes in your industry in 2017 and anything to watch out for in terms of market trends?

As landlords seek new ways to fill vacant retail units I believe we will see continued growth in the leisure industry and especially in the centre of the larger towns and cities.

Out of town we will see further downsizing of the larger supermarkets as they look to become more efficient. This has already led to them subletting space to complimentary tenants such as Cafes, Gyms and other non food retailers and this trend will continue.

We are also seeing the supermarkets looking at large scale residential developments on sites in their land banks especially in London and the South East where land values are very much higher.

It will be interesting to see what comes from the purchase of Argos by Sainsburys. This is likely to include Argos moving stores into some of their existing estate alongside the supermarket and an increase in “click & collect” for both retailers. What is not known is what their plans are for the Argos in town stores and it will be interesting to see what approach they take with this element.

Richard Dunn is a partner at Sanderson Weatherall and specialises in office agency.

What have been the biggest changes in your industry for 2016?

The uncertainty caused by the Referendum and decision to Brexit has had the biggest single impact on the Leeds office market in 2016.

What has been your highlight for the year?

The completion of Central Square in Leeds, in my view the best office building in the city and the only office building in our market with a BREEAM Outstanding rating. Also, the successful letting of the 2nd floor in City Point to Blacks Solicitors meaning the building is 100% let for the first time.

What will be the biggest changes in your industry in 2017 and anything to watch out for in terms of market trends?

The continued embracement of new technology and agile working practices by occupiers and the trend towards better quality, more environmentally sustainable office buildings with larger footplates will drive new office development in the city albeit occupiers will typically occupy less floor space with more staff in future.

Sanderson Weatherall which employs around 200 people, and has a turnover of £15m. The company operates nationwide from offices in Newcastle, Teesside, York, Leeds, Manchester, Birmingham, London, Bristol and Exeter.

It provides property, machinery and business asset services across a range of sectors.