With the notable exception of larger residential sites there has been little speculative development locally over the recent past notwithstanding the continued positive economic indicators. Much of what you will see as you drive around is driven by owner occupier demand rather than developers building commercial property in the hope of attracting buyers or tenants, however, I am beginning to see a change in attitudes and enquiries, not just from established local property developers, but also from property owners who are looking at redevelopment and refurbishment of redundant buildings and sites rather than sale at knock down prices.
I am asked on a regular basis about potential for occupation following development and, with developers willing to accept lower rates of return coupled with improving market conditions, my advice is far more positive than it was 18 months ago.
The low rates of return available from other forms of investment are making property returns more and more attractive and with local land and building values far more tempting than those further south, particularly for redundant commercial sites and buildings, speculative development is starting to return to the market. This coupled with the return of some lenders to the property redevelopment and investment sector, albeit on a limited basis, all bodes well for the future.
The redevelopment process remains a long one and while it might be sometime before we see the finished product, the process must begin somewhere and todayâ€™s enquiry may become next year’s retail park or terrace of industrial starter units. At Holroyd Miller we are here to support and assist Owners and Developers as they look for the best returns on their commercial property assets.