Worcestershire’s commercial property market performed better than predicted during 2023 according to a newly published report, but business growth is being stifled by the lack of quality accommodation. While take up of office space increased by 21%, the industrial market stagnated against a backdrop of demand far outstripping supply.
Speaking at the launch of GJS Dillon’s Commercial Property Market Report 2024, Andrew Lewis, Commercial Agency Director and author of the Report said: ‘We saw a 21.4% annual increase in take-up of office space with employers prioritising size, location and quality when it comes to seeking new premises. The rise in demand for town and city centre offices continued. Meanwhile industrial occupiers are lapping up quality units but the supply of space was well below demand so take-up was unmoved’
2023 office space transactions totalled 203,210 sq ft compared with 167,353 sq ft in 2022. The industrial market had a take-up of 1,103,500 sq ft in 2023 compared to 1,095,182 sq ft in 2022. The stand-out success across both sectors was Worcester, with office rents passing through the £20 per sq ft barrier for the first time ever at the Vinegar Works and a 246% increase in industrial take-up being attributed to 5 lettings over 10K sq ft.
The report was launched at a well-attended event at Sixways and featured a discussion panel chaired by Rory McAllister. Joining John Dillon, managing director of GJS Dillon on the panel were Craig Baldwin, Area Director, Real Estate, Midlands & South Wales for Lloyds Bank, Gary Woodman, CEO at Worcestershire Local Enterprise Partnership and Gerard Ludlow, Director at Stoford Properties Ltd.
The discussion covered topics ranging from the supply of employment land in Worcestershire, the need for local employers to attract younger workers, the future of the office market and the viability gap between building new office space in the county against a backdrop of build cost inflation.
‘The vast majority of businesses in Worcestershire are SMEs employing 5 to 20 people and developers are not building that kind of property’ said John Dillon ‘If that doesn’t change, the market will just deliver big warehouses and this conundrum is stopping businesses from growing. The other major obstacle to business growth is we’ve lost a lot of key employment sites to residential development. We need to take back control’
This is the sixth year of publication for the highly anticipated report which looks in detail at the office and industrial markets across the county’s six sub-markets. Based on figures from CoStar, and published in partnership with the Worcestershire LEP, the report enables GJS Dillon to advise commercial property owners, local developers, landowners and local authorities on their commercial property strategy.
GJS Dillon’s Worcestershire Commercial Property Market Report 2024 is available to download here www.gjsdillon.co.uk/marketreport
To discuss the report further or to find out more about commercial property in Worcestershire contact Andrew Lewis on 01905 676169 or see www.gjsdillon.co.uk