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Midlands industrial property market picked up in 2014, new research shows
The economic recovery helped industrial properties in the UK’s Midlands pick up in 2014, the latest regional analysis shows. Last year saw a 17.6% increase in sales volumes on industrial properties of more than 100,000 square feet, according to the Birmingham office of global real estate adviser Cushman & Wakefield. Total take up in 2014 of the region’s 100,000 square feet plus properties was 8.79 million square feet of space, which was slightly up on 2013’s 8.63 million square feet, itself the best year for transactions since 2008. In addition, 2014 saw an increase in demand for industrial properties across the board, with the volume of enquiries increasing by 5.5%compared to 2013 and the overall space required increasing by 10%. ‘The improvement in total take-up, volume of enquiries and overall space required witnessed in 2014 is a clear indication that confidence continues to grow in the industrial sector amongst occupiers,’ said David Binks, industrial partner at Cushman & Wakefield in Birmingham. ‘The improving economic conditions continue to encourage business growth leading to increased demand to accommodate both expansion and relocation requirements,’ he added. He explained that the increase in demand had exacerbated the long standing problem in the Midlands of the lack of availability of grade A space. As a result, occupiers found that in 2014 there was less choice available, with some forced between opting to wait for existing buildings or speculative developments or entering the design and build market. For those unable to wait for buildings to be constructed, and with grade B space being limited as well, the only option left was to look at grade C space. Binks said in 2014 many firms opted to go down this route as a temporary solution, particularly those with fixed term contracts to fulfil in sectors such as automotive and distribution. This helped boost take-up of grade C industrial space during the year, with 16 transactions of buildings of more than 100,000 square feet totalling 3.65 million square feet being completed, compared to 2013 where three transactions were completed totalling 830,000 square feet. Take up of similar sized grade B space was less, at 2.14 million square feet compared to 2013 which was 2.62 million square feet, although this reduction is a function of the limited supply of facilities available of this quality. ‘We believe the increase in grade C take up is reflective of occupiers requiring immediate occupation of buildings on three to five year term certain deals, rather than better quality buildings where longer lease terms would be required. This is especially the case for third party logistics companies, where contract lengths tend to be three and five years, and more lease flexibility is important,’ Binks pointed out. ‘The shift in demand for grade C space in 2014 over grade B is reflective of a greater quantity of take up in of the latter in 2013, which significantly reduced stock levels. Essentially the market has continued to polarise, if an occupier wanted to take… Continue reading
New home building set to remain strong in Australia, it is claimed
Lending figures shows that new home building activity in Australia is set to remain at a strong level, according to the Housing Industry Association, the voice of Australia’s residential building industry. During November 2014, the number of owner occupier loans for the construction or purchase of new dwellings declined by 1.4% but lending was 4.6% higher than the same month in 2013. Furthermore, new home loans increased by 0.7% in the three months to November and were 7.3% higher than the same period a year earlier. Comparing the total number of owner occupier loans for new housing in November 2014 with November 2013 shows the strongest increases was in the Northern Territory with growth of 63.9% and in Tasmania with growth of 14.3%. There were also increases in Victoria where growth was 3.3%, Queensland up 1.6% and South Australia up 1.7%. However, new loan volumes fell in in New South Wales by 6.9%, in Western Australia by 4.6% and in the ACT by 2.3% over the past year. HIA senior economist Shane Garrett pointed out that building approvals reached an all-time high during November, and the lending figures add further to the evidence that Australia’s new home building industry will start 2015 on a strong footing. But he also warned that although the number of loans remains high there is little sign of further growth. ‘The number of loans for new home purchase has fallen over the past year. Fortunately, the flow of loans for new home construction is very solid,’ he explained. ‘Indeed, the number of new home construction loans in November was 7.6% higher than a year ago. Healthily functioning housing markets should see a substantial turnover of homes in any given month,’ he pointed out. ‘However, the total volume of loans for home purchase has been falling consistently over the past few months. As home prices have risen, so too have the stamp duty bills paid by ordinary home owners. Excessive taxation is hampering the efficient operation of Australia’s housing market. The issue requires immediate attention,’ he added. Continue reading
UK house prices up 10% in year to November 2014, ONS data shows
UK house prices increased by 10% in the year to November 2014, down from 10.4% in the previous month, the latest data from the Office of National Statistics shows. House price annual inflation was 10.4% in England, 3.1% in Wales, 4.4% in Scotland and 11.7% in Northern Ireland, the data also shows. Overall house prices continue to increase strongly across the majority of the UK, with prices in London again showing the highest growth. Indeed, house price increases in England were driven by an annual increase in London of 15.3% and to a lesser extent increases in the East at 11.9% and the South East at 10.8%. Excluding London and the South East, UK house prices increased by 7.1% in the 12 months to November 2014. On a seasonally adjusted basis, average house prices increased by 0.2% between October and November 2014. The index also reveals that in November 2014, prices paid by first time buyers were 11% higher on average than in November 2013. For owner occupiers (existing owners), prices increased by 9.5% for the same period. Peter Rollings, chief executive officer of Marsh & Parsons, said that with property price growth slowing it mustnot be forgotten that the market has seen a double-digit rise in home values over the past 12 months and this an impressive leap. 'After the exertions of the summer months, this is simply a period of natural re-calibration, restoring a more sustainable pace of price inflation. Growth is still ticking along in the right direction, with a steadier 0.2% climb in the month to November,' he explained. 'The first half of the year is typically the most energetic for the property market, and we’re already seeing reinvigorated demand in the new year, as more people turn their sights to getting their foot on the property ladder or moving home. Conditions are ripe for buying, with a rise in supply of property for sale, a relaxation in bank lending criteria and historically low mortgage rates ensuring less fraught competition for homes,' he added. Graham Davidson, managing director of Sequre Property Investment, said he was not surprised by the slowing rate of house prices over the course of November. ‘Whilst seasonality can account for some of this slight decline in growth, it was likely that prices in many places in the UK would have to start to slacken at some point. London and the South East in particular were bound to experience a slump, as the rate of increase simply could not continue,’ he pointed out. ‘As we are now less than six months away from a general election, there is some economic and political uncertainty within the UK which, coupled with the introduction of Capital Gains Tax for overseas buyers, may be putting off purchases by non-UK buyers and this in turn could have helped cool price rises,’ he explained. ‘The prospect of the Bank of England’s new powers announced in October to restrict… Continue reading
