Partner Article

Positive outlook for commercial property in 2015

The year 2014 was a good one for the North East commercial property market. Enquiries were up, confidence rose and deal-making was back in vogue again.

Growth was achieved on the back of increased confidence in the business community and an appetite for expansion. Companies won more orders, increased their workforce and, in many cases, moved to bigger and better premises.

So what will 2015 have in store for the market? The fact that the economy has expanded by 3% in the last year – making Britain one of the best-performing economies in Europe – has fuelled expectation that the commercial property revival can be maintained.

We should guard against complacency, however. We can all recall what happened in September 2007, when the collapse of Northern Rock signalled the end of the economic boom and the start of one of the worst financial crises in recent history. Continued low growth in the Eurozone and a deepening recession in Japan have fuelled fears of a slowdown in Britain – but all the indicators point to steady, if unspectacular expansion in 2015.

The upcoming General Election has created uncertainty surrounding Government policy but hopefully the next incumbent will do several things to keep the commercial property revival going. The retention of business rate relief in enterprise zones, for example, would encourage the creation and growth of industry clusters in key sectors such as manufacturing, electronics and software.

We also need a relaxation of planning laws. It’s vital that the review of the General Permitted Development Order (GDPO) – announced by current Chancellor George Osborne – goes ahead. This would fast-track the conversion of warehouses and light industrial buildings into residential properties, helping to remove obsolete stock from the commercial market and create much-needed new homes.

In addition, the market needs to address a significant shortage of Grade A office space to keep up with demand. In the last couple of years there has been an increase in the number of businesses looking to expand into high-quality premises.

All in all, though, the future looks bright for commercial property in the North East. The New Year has brought renewed optimism that the market revival can be sustained throughout 2015.

By Neil Hart, director at Bradley Hall

This was posted in Bdaily's Members' News section by Bradley Hall .