Breaking the Habit
27th November 2013
All too often we hear of the “good old days” of commercial property; the days pre-2008, when we all made hay whilst rents spiralled, banks actually lent money and developers were building …
We all know what happened next…
Most in the industry now realise that those days won’t be coming back any time soon, and what’s more – they shouldn’t. We’re still feeling the fall-out from the 2008 crash, and market fragility remains. The commercial property sector in Nottingham, like most places in the UK, is in a transitional phase. Whilst the deals have begun to flow again, there remains a very real danger that stock will run out. The industry is facing a real stockpile issue, but there remains little, if no, speculative development.
So, how do we fix this? At NG we’re championing the abolition of Empty Business Rates until a building is occupied. We would also welcome the banks opening up more to entrepreneurial developers who want to help ease the block on new stock.
We’ve seen the Government attempt a slight climbdown by offering an 18 month exemption from rates for new build properties which enter the Rating List between 1 October 2013 and 30 September 2016. Talk about closing the gate after the horse has bolted…
Once the stock issue is resolved, we’re confident there will be more choice and variety for occupiers looking for new premises. Similarly, agents will not all be competing with each over an ever-diminishing pool of stock.
However, we are optimistic. We don’t see market volatility lasting much longer than another 12-18 months. We’ve seen, locally at least, deals beginning to happen as the outlook for the economy picks up. We’ve had false dawns before, but this time all forecasts seem to point to a true, sustained period of growth, and this is obviously great news.
What we must do is learn from our mistakes and avoid slipping back into the bad old habits of the past, where deals were seemingly written on the back of cigarette packets, and the commercial property sector grew bloated and unsustainable.
But, until the stock we’ve let has been replenished then we won’t see a true renaissance in the commercial property market in Nottingham. So, whilst our message to the rest of the industry has to be: don’t fall back into the bad old habits of the past; our message to those who can grease the wheels of the commercial property sector in Nottingham remains: help developers build and give tenants more choice. The future success of inward investment into the city and wider county region depends on it.