Following a busy start to 2023 and a year of significant growth for us in 2022, Harry Lewis, Operations Director, shares his observations on the trends we are seeing across the commercial property landscape from our clients and an outlook for the coming months.
Decreasing Occupancy in Cities
Our work is predominantly but not restricted to the Midlands, where we are seeing reducing occupancy levels in the key cities as companies are reducing the floor space they occupy. This obviously isn’t a surprise following the past few years and as tenancy agreements come to an end.
As a result, what has been retained has been adapted to create new environments and configurations to encourage people to spend more time in the office as well as attract new employees in what is a challenging recruitment market.
We are increasingly seeing our clients, both property owners and tenants, engage with us to understand how to redesign and refurbish spaces to attract people back in. There is considerable investment in bringing people back to the office despite reducing rental costs.
Tackling the Energy Conundrum
The increasing cost of energy is undoubtedly putting pressure on property spend but we have seen this speed up the thinking around improving the sustainability of buildings to reduce energy consumption and becoming more environmentally friendly. This will help to reduce the price for the near future as well as future-proofing a building for the long term too.
It is proposed that 2030 will be the year that new legislation related to all non-domestic rental properties to be rated at least EPC “B” standard will come into force. With the majority of office stock falling below this standard, there is a significant need to invest and improve the energy efficiency ahead of the change to legal requirements.
With utility costs sitting within the property budget, there is a focus on investing in improving energy efficiency, installing LED lighting, and replacing heating systems with solar panels and infrared heating systems.
This is another factor that is concentrating minds on the quality over the quantity of space. Reducing the floor space and having a better place to welcome people, will help to reduce energy consumption and associated costs whilst optimising the usage of the space. Then it is a worthwhile investment which organisations and individuals are benefiting from.
Surging Demand for Quality Industrial Space
There is a significant demand across the region for high-quality industrial space. We have been working closely with our property investment and property management clients to upgrade and refurbish industrial spaces rapidly in order to bring them back to the market and relet.
Over 60% of the industrial projects we have completed during the past 6 months were relet whilst the works were still underway. One of our industrial clients is reporting 98% occupancy levels across its portfolio.
With warehousing and logistics demand increasing alongside the evolution of dark kitchens and catering, high quality, practical space of different sizes.
New entrants to the market are driving the need to repurpose and reconfigure space to provide more yet smaller units. A rise in demand for warehousing and logistics space with online and e-commerce is coupled with the evolution of dark kitchens.
What does this mean for commercial property managers?
Create welcoming and engaging workplaces that teams want to spend time in.
Improving the energy efficiency will save money and prepare for new legislation in 2030.
Ensure your industrial space is appealing to your local market.
Discuss Your Refurbishment Project
We provide a full-turn key provision from construction and fit-out including Shell, Cat A and B.
Our aim is to support you from initial planning right through to interior design and ongoing property maintenance.