Commercial Property Boom is Not Restricted to London
While it may seem obvious that office space in the economic powerhouse of London is always going to command good prices, there are plenty of other locations that are subject to high demand and so present excellent opportunities for the buy-to-let investor.
Big cities such as Manchester and Birmingham have strong economies in their own right and as such are seeing a rise in demand for quality commercial property. Manchester in particular has undergone massive expansion and regeneration in recent years, which has seen more and more business relocated to the city. According to local newspaper the Manchester Evening News (MEN), nearly one million square feet of office space was let out in the city centre over the past twelve months.
Chris Mulcahy, a partner at King Sturge property consultants, told the MEN that, on a regional basis, “Manchester enjoyed the highest take up of office deals over 10,000 square feet in 2006”. He points to “a number of high profile deals” with big businesses such as to HBoS, Barclaycard and HSBC as the reason why prime office rents in the city are reaching ┬ú28.50 per square foot.
Mike Walker, head of the Manchester office of another property consultant, Colliers CRE, was also predicting good things for the future when he spoke to the MEN. “I don’t see any reason why the property market shouldn’t continue as it is now,” he said, citing a stable economy as one reason Manchester’s good fortune should subsist. “We’re pretty confident that local occupiers are still actively looking for new space, both in the office and industrial sector,” he added.
Other areas of the UK are also enjoying something of a commercial boom – and some of them are not what would be considered “likely suspects”. According to officebroker.com, “Darlington, Falkirk and Newport are among a number of smaller towns and cities which are seeing a high demand for serviced office space”.
The website compared various statistics, including the number of offices let, percentage revenue achieved and the percentage number of total deals. Predictably, parts of London, Manchester and Birmingham made up the top four. However, Reading came in at number five, perhaps due to its proximity to the capital and good transport connections.
When the site compared revenue figures against the total number of deals done, however, other potentially lucrative locations emerged which, as well as those mentioned above, includes Aberdeen, Derby and Stockport. In every case, good transport links were a key factor in boosting commercial space rents. The buy-to-let investor who is interested in this market may therefore be well served looking at commuter towns and areas well-connected to the motorway network.