Last year was a strong year for the Daventry office and industrial property markets. The year saw rents in all sectors increase, with incentives reducing significantly. But what is the main driver behind this and who are benefiting the most?
The main driver? A lack of stock. Those benefiting more than others? Those investors willing to speculate by building new units or refurbish existing stock to a high standard.
In the years following the downturn, there was very little, if any speculative development and now that occupiers have renewed confidence and the market has turned, both new businesses and established growing companies are becoming increasingly frustrated by the lack of good-quality options that are on offer.
Those investors and developers that have been able to offer good-quality stock over the last 12 months have reaped the benefits. A good example is Egerton Close, Drayton fields. Property investment company Draper Properties, purchased three brand new, speculatively built, vacant warehouses totalling 23,400 sq ft. Purchasing a terrace of vacant properties might previously have been considered a risk, however the units were the best available, for their size range in Daventry. The result, is that we have let all three at good rents, to established companies, one of which has relocated to the town from Lutterworth.
An alternative example of the lack of stock and the results for a proactive investor is that of Minehart Developments. Chryso have been established in Daventry for a number of years and have seen continual growth, which meant they needed to seek new premises. Where as in previous years they would have had their pick of the market, their initial search showed no obvious solutions in Daventry itself and they were forced to consider moving further afield. After lengthy discussions, we have been able to agree terms, whereby Minehart are adapting one of their existing properties to create something bespoke, to suit Chryso’s requirements, which has ensured they remain in the town for the foreseeable future.
The message for 2016? Those property owners who are willing to invest money into their premises will continue to reap the rewards. We seem to be at the stage of the market where good quality properties are achieving unprecedented rents, where as those offered in a poorer condition are not just achieving lower terms, they are not achieving anything at all.
If you would like to discuss your property requirements in Daventry, either landlord or tenant, Drake Commercial are the most active commercial agents in the town. Contact us on 01604 620616.
Tom Drake (April 2016)