Rob Darrington, Head of Office Agency in our Sheffield office, puts forward his predictions for the Sheffield property market.
Lack of good quality stock
We still have a lack of good quality stock, which is a cause for concern. Without stock, local businesses will find it hard to expand and firms wanting to start up in Sheffield will struggle to find desirable premises.
The perceived gap in market values and pre-let/sale values (which are based on actual costs), still present a challenge, as does the economic uncertainty, which is of great concern for many occupiers.
Occupier demand high in city centre but take-up is slow
Difficulty in agreeing any pre-lets/sales might mean that those deals underway in 2012 could potentially drag on until 2013.
The city centre will continue to be the most desirable area for most occupiers. Areas outside of the centre are becoming less attractive as premises continue to become less more run down. A lot of activity is still dependant on what happens to the new proposed retail core over the next year.
No new developments kicking off
It is unlikely there will be any speculative developments during 2012. It is also a little too soon for any pre-let's to be agreed and start on site. So, it looks like we won’t see any cranes on the horizon any time soon.
Growing demand from financially sound coorporations
Transaction sizes increased in Sheffield last year, demonstrating there is a growing demand from corporates. This year, we expect to see a stable demand from financially sound companies. It will hopefully mean that more medium/large size occupiers take space in Sheffield. Whether that means we’ll see a further increase in take-up or transaction sizes in 2012, remains to be seen.
Property market needs to support speculative developments
The property market needs funding more than anything to assist speculative development. A final agreement on the New Retail Quarter is important along with more inward investment, which would help to improve local occupier confidence.