News

A shortage of smaller office and industrial units across North Worcestershire coupled with high demand for space is pushing up commercial property rents to record levels, with office rents increasing by 10%, and industrial rents by 6% in Bromsgrove and Redditch, according to one of the county’s leading commercial property agents.

Andrew Lewis, Head of Agency at Bromsgrove commercial property consultancy and Chartered Surveyors GJS Dillon, says that office vacancy rates of only 2% in Bromsgrove and 5.4% in Redditch, with no new space on the market, or in the pipeline, have led to the significant growth in office rents.

Andrew Lewis says: “Bromsgrove and Redditch’s 10% annual office rental growth is in comparison to average rental growth of zero (0%) across the country.  This shows the appetite of office occupiers to remain, grow and move to the county.   Over the next quarter we predict this growth will remain constant, as doubt continues about the final Brexit agreement.”

Vacancy levels of an average of 2% are producing a similar upwards pressure on industrial rents which have grown by more than 6% in both Bromsgrove and Redditch in the past 12 months, but developers have started to address the shortage of warehouses and industrial units.  46,000 sq ft of new space came onto the market last year, with 397,000 sq ft presently under construction.

“There is some relief in sight with the new industrial space, but by no means all of this will be small and medium sized units.  Before the new developments have an impact, we expect average annual rental growth to increase to 8%,” says Mr Lewis.

Rental growth combined with low interest rates and banks willingness to lend will continue to make commercial property attractive to both investors and owner occupiers where freeholds become available.

Mr Lewis says: “Buyers can acquire commercial property at lower rates than the cost of renting, while sellers benefit from the high prices on the back of increased demand.  It is rare that there’s a market which benefits both parties, so we expect freehold sales activity to remain strong.”

GJS Dillon produces quarterly reviews of the Bromsgrove and Redditch commercial property market, which it uses to advise vendors, purchasers, developers, landlords and tenants.  Further information from Andrew Lewis on tel. 01527 872525 or via www.gjsdillon.co.uk