Property professionals from across the Midlands have been gathering over the past week to hear international property consultants, King Sturge, give their predictions for 2011.

Speaking of a mixed outlook across the region, 2011 is generally being approached with a degree of caution with glimmers of hope, certainly in the occupational markets.

The industrial teams stated that opportunities existed for growth in the Midlands from internet sales and the growing demand from waste management and renewable energy sectors.  A bounce in the manufacturing market is also looking positive for the region.

Despite very limited speculative schemes over the past few years and the dwindling supply of new/modern stock in prime locations, it was stated the conditions were not yet ready for speculative development to return.

In 2011 strategic land deals would come to the fore in prime locations, creating oven ready sites that could be turned around quickly, but proving deliverability and quality would be the main drivers.

A key trend in the office market going forward would be a scarcity of quality, Grade A stock, with little new development imminent in any of the region's towns and cities.

Occupiers will still be very much in the driving seat and many companies will now be incentivised to move and upgrade their space at minimal or reduced costs with landlords continuing to offer flexible packages.

Austerity measures also continue to remain a threat, with the tap dramatically turned off for public sector take up in some cities, and the threat of surplus public sector buildings adding to the overhang of stock.

A growing divide in the market between primary and secondary stock is also thought to be emerging. A downward trend in rent in the secondary market and extended voids is reducing viability of redevelopment or refurbishment, resulting in some buildings becoming illiquid and an underclass of obsolete properties occurring.  Banks also look set to step up sales of distressed properties. 

Overseas funds are to remain dominant for prime assets in 2011. Whilst London would be the main benefactors, some of the region may see a wave of activity. 

King Sturge's planning team said 2011 would be a tough year for planning and development as the Localism Bill unravels and reforms began to bite, creating another hiatus in the planning system. Developers will also need to spend even more resources to ensure they address local issues.

There will be polarisation, says the planning team. Affluent areas are less likely to welcome development. Regeneration areas, where there is obvious need, are unlikely to be viable without public sector support. Rejuvenation of inner city areas in the Midlands will require an innovative and flexible approach to be taken by both public and private sectors.

However, on a more optimistic note it was stated that Localism could offer a simpler approach to gaining planning in many cases, with applications determined more on their merit, rather than through rigid adherence to planning policy and standards. All Local Planning Authorities (LPA's) want private sector jobs. This should encourage a more flexible and less dogmatic approach about employment land use, particularly distribution.

Commercial such as food retail and large mixed use schemes promoting employment and commercial benefits may also prove more attractive to LPA's because of job generation.

In summing up, King Sturge said now is the time to start planning for the future and engage with LPA's to ensure for future planning. Asset management would also be a key theme for 2011 - looking after tenants to ensure returns from income could be maximised and preparing sites for the future.