It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Richard Heslop, Managing Director of DE Commercial, a boutique property consultancy in Ilkley.
The first half of 2022 will be dominated by Covid, supply chain issues and the increasing costs of construction. While Covid has been with us for 2 years now, the latter two came to the fore in the second half of 2021. What is certain going forward into 2022 is the uncertainty created by these issues.
Having said that the commercial property market remains resilient.
We expect to see the warehouse/industrial market continue to make the gains witnessed over the past 12 months which has seen development land deals exceed £1million per acre with freehold and leasehold values gaining more than 20%.
A cloud will remain over the office market which is now dominated by “work from home.” Going forward we expect more companies to develop their strategies of employees mixing home and office working. This will have a dampening effect on the growth potential for this market.
The investment market remains robust and the supply shortages will continue to hold back this sector at the smaller end. Property yields continue to outstrip other asset classes and private investors will be loathe to sell if there is no alternative home for their capital. Demand from institutional investors, particularly for warehousing/distribution buildings, will ensure yields harden further as they look to strike deals off plan or during the early stage of construction.
With regard to the retail market, the two overriding factors affecting demand will continue to be the high level of rates payable coupled with the inexorable rise of internet shopping. As work from home spills over into 2022, the internet will continue to win out.
