Redditch is a “hotspot” for industrial property with rents experiencing significant growth, according to Worcestershire’s largest independent commercial property agency GJS Dillon.
“The town has become a prime industrial location, with rents increasing over the past two years to more than £5.50psf, as occupiers from Birmingham have realised they can get well located space with good links to the M42, M5 and M6 at more affordable rates,” says Andrew Lewis, Head of Agency at GJS Dillon, writing in GJS Dillon’s Worcestershire Commercial Property Market Report 2018/2019.
Supply levels are good at 22 months, with new schemes having come to the market, such as Crescent Trade Park offering smaller units for the SME market, and Velocity 42 catering for larger occupiers. However, headline rents still remain the lowest in the county.
“Freeholders have jostled for space that is not investment stock, pushing purchasers into paying a premium for good quality space. Capital values remain strong at an average of £82psf, but it is important that smaller units of below 10,000 sq ft remain available for owner/occupiers to purchase,” says Mr Lewis.
The proximity of Birmingham also attracts office occupiers to Redditch. Office take-up in 2018 was just below that of 2017. Availability levels are slightly up on the previous 12 months, as lack of grade A space and increasingly old stock kept average office rents at the lowest level of all districts in the county at just over £10psf.
Mr Lewis continues: “Redditch is also a hotspot for investors in commercial property. More than 75% of office transactions in 2017 were lettings, with this figure rising to 85% over the 10 year average. This has led to freehold prices being among the highest in the county, particularly in comparison to rental values.
“However, the biggest issue facing Redditch is the growing obsolescence of its existing office stock, with little Grade A accommodation available. To tackle this issue in the short term, existing properties that have been refurbished to a high specification should command top rates.”
GJS Dillon produces an annual review of Worcestershire’s commercial property market, based on figures and analysis from CoStar, which it uses to advise vendors, purchasers, developers, landlords and tenants. Further details about the 2018/2019 market report can be found at www.gjsdillon.co.uk/marketreport or from Andrew Lewis on tel. 01527 872525 or email. firstname.lastname@example.org.