It must be said that the back end of 2016 was slightly quieter than anticipated, which had much to do with the BREXIT vote and the element of uncertainty that this caused. Since the turn of the year however, the commercial property market has gone from strength to strength and we have seen more activity than at this stage last year.
We need look no further than Daventry as an example of this fast paced start to the year. The continued lack of stock has meant that for the right properties, deals are being agreed almost as quickly as the opportunities are coming to the market. The knock on effect of this is that rents and even more so freehold values, are increasing at a rapid rate.
Drake Commercial statistics would suggest that rents on second hand industrial buildings have increased by around 10-15% since this time last year. From a freehold perspective, the rise has been even more dramatic with the values being achieved in some cases as much as 20-25% above the levels 12 months ago. In the office sector, the levels have been less dramatic but still positive.
So aside from talking up the market in the usual agents fashion and other than the balance of supply and demand in the market, why is Daventry showing such improvement.
New development is one reason and these schemes have proved successful. Amazon have taken the 297,000 sq ft speculatively built warehouse on Royal Oak, built by IDI Gazeley. In recent weeks, it has also been announced that Gardman Garden Products Suppliers will move from Kings Lynn to Apex Park in Daventry. The huge 416,412 sq ft unit was developed about 15 years ago by Prologis.
Elsewhere at Royal Oak, construction is well underway on a new 4.3 million pounds training and development centre for Volvo cars which is due to open in summer 2017. The new state of the art building will replace an original 1980 built facility and has been agreed as part of a sale and leaseback deal with Daventry District Council.
Another factor is the positive impact of the new A45 Daventry development link road. After many years of discussion, construction has finally started on the new 3.5 mile carriageway that will provide improved access between the town and J16 of the M1. Occupiers and developers alike are already showing their support for this improved access route, which is due to be completed in early 2018.
Another reason could be the signs of improvement in the retail offering in Daventry. This has a knock on effect in attracting businesses and their staff. A good example would be the long awaited 12 acre development of ‘Site 5’ in Daventry town centre, where there are now positive signs. Henry Boot Developments has lodged a further planning application with the Daventry District Council, seeking approval to build a food store, retail units, a pub and hotel and a fast food restaurant and this is currently under consultation.
Lastly the population of Daventry and surrounding areas is continuing to grow, with various residential schemes both proposed and already under development. Local authority figures suggest the size of the town will have doubled by 2021 and an increase in population from a business perspective, means a larger pool of staff to choose from.
All in all, very positive signs for a town that was perhaps previously left behind by its larger surrounding neighbours.
Tom Drake – April 2017.