One of the Midlands' leading business property consultants has
issued a rallying call for a new sense of reality in real
estate.
John Truslove, whose firm has handled commercial and industrial
property transactions across Worcestershire and Warwickshire for
nearly 30 years, said that while business property was picking up,
there was still an unreal sense of expectation, particularly from
the institutions.
He said: "We experienced more volume of business in the final
three months of 2009 than in any other three month period in the
last two to three years, but this welcome surge in completions has
to be tempered with a note of caution.
"The completed deals have included a mixture of businesses
seeking to lease or buy but it is proving harder than ever to get
deals across the finishing line."
He said that negotiations between landlord and tenant had become
more difficult than at any time in the past 40 years.
"Landlords are seeing no rental growth at all and tenants are
looking to economise as much as possible.
"Industrial property is tending to be worth 20 per cent less
than it stands in the owner's books and figures such as £50
per square foot for oldish second hand factories are pure fiction
these days.
"There is still too large a gap between the owner's idea of
capital values and a realistic sale price and this is holding up a
number of transactions involving City-based funds.
"It must be difficult for someone in the South-east to
recalibrate their years of experience in rental and capital growth
when dealing with the more pragmatic Midland businessman, but that
is what needs to happen.
"Where institutions are under pressure to sell to release
capital for investors, then they are simply going to have to be
prepared to bite the bullet and find a realistic pricing level that
will enable agents to achieve a sale to an increasingly demanding
and sceptical marketplace," he said.
Recent completions achieved by John Truslove include the sale of
18,560 sq ft at Units 2, 3 & 4 Old Forge Business Centre in
Redditch by Fermor Properties Ltd for £690,000 to Sugarmill
Properties, the sale of 10,129 sq ft at 2c Eagle Road, North Moons
Moat, Redditch by BA Thorne Machinery for £350,000 to
Praybourne Ltd, and the sale of a 2,281 sq ft office building at
Unit 1, Centech Park, Fringe Meadow Road in Redditch by Commercial
Estates Group for £197,000 to PV Wall & Sons Ltd.