News

A shortage of smaller office and industrial units across South Worcestershire coupled with high demand for space is pushing up commercial property rents to record levels, with office rents increasing by close to 10%, and industrial rents by nearly 7%, in Worcester and Wychavon, according to one of the county’s leading commercial property agents.

Andrew Lewis, Head of Agency at Worcestershire commercial property consultancy and Chartered Surveyors GJS Dillon which has offices in Worcester and Droitwich, says that office vacancy rates of only 1.4% in Wychavon and 6.5% in Worcester, have led to significant growth in office rents.

Mr Lewis says: “Worcester and Wychavon’s 9.5% 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.  The 161,000 sq ft of new office space presently under construction in Worcester will help occupiers looking for office accommodation in the city.

Vacancy levels of an average of 4.3% are producing a similar upwards pressure on industrial rents which have grown by an average 6.85% in Wychavon and Worcester in the past 12 months.  40,000 sq ft sq ft of new space came onto the market last year, with 383,000 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.  In fact the vast majority is of buildings of more than 45,000 sq ft at developments such as Worcester Six,” 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 Worcester and Wychavon commercial property market, which it uses to advise vendors, purchasers, developers, landlords and tenants.  Further information from Andrew Lewis on tel. 01905 676169 or via www.gjsdillon.co.uk