Pictured: Jones Lang LaSalle's regional chairman, Jan
Thompson and Ian Cornock, Head of the Birmingham office
Financial pressures on developers should start to ease during
2012 in two key sectors, according to a heavyweight team of
analysts assembled by Jones Lang LaSalle in Birmingham today.
Chaired by Jones Lang LaSalle's regional chairman, Jan Thompson,
the agency's Midlands 'Property Predictions' event heard industrial
specialist Cameron Mitchell suggest that spec funding for sheds in
the sub-30,000 sq ft niche could return as the year unfolds.
Investment director Allan Wilson was bullish about prospects in
the industrial sector, saying there was funding available for
pre-lets, where the lease and tenant are right. However, the sweet
spot is small, and the number of potential funders reduces at lots
of less than £10 million," he added.
The city centre market held up well during 2011, thanks to a
buoyant Q4 which took the annual lettings total to just under
670,000 sq ft.
Jon Carmalt, Jones Lang LaSalle's Birmingham offices director,
doesn't see such a strong performance for 2012 though, predicting
that demand will most likely ebb to between 550,000 and 600,000 sq
ft, given the current dearth of chunky requirements.
Preliminary work on the Snow Hill-New Street Metro line starts
this year, and Michael Brough - who heads the Birmingham resi team
- told the event "significant improvements in city centre
infrastructure" would be needed to drive the city centre market
back towards its 2006 peak.
"Residential development land is still in demand, but the
parameters are very specific, primarily for between 30 and 50
units, on sites of 2-5 acres, with planning permission," he added
.
Matt Smith, director at Jones Lang LaSalle's Nottingham office,
gave an overview of the East Midlands; predicting an increased
emphasis on 'design & build' in the industrial sector, with
take-up in the office market not shifting too far from 2011.
Andrew Burrell, Jones Lang LaSalle's national head of
forecasting, came up for the 'Property Predictions' event, and
admitted 2012 would "not be a vintage year for rental growth,
especially in the difficult early months."
He expects much greater rental stability, across all commercial
sectors, but believes that incentive packages will remain generous
as landlords tussle for tenants.
Nick Webb, part of Jones Lang LaSalle's retail team in the
Midlands, believes the trend for 'clicks and bricks' operations
will continue, and sees an increasing polarisation between prime
and secondary space on the High Street.
Peter Leaver, Jones Lang LaSalle's lead planning director for
the region, is optimistic that the simplified planning requirements
for Enterprise Zones (EZs), and the concept of Local Development
Orders, will ultimately drive employment growth.
Ian Cornock, Jones Lang LaSalle's head of office in Birmingham,
also believes that EZs and Local Enterprise Partnerships will make
a positive impact on the property market, and at a local level, for
example, the outline business case for Paradise Circus has already
been approved by Birmingham City Council.