WHEN the Covid pandemic first became an issue for business – and we are going back to the early months of last year – no one could predict which way the market would go.
“None of us, not even the business owners themselves, could predict or even guess at how they could trade,” said Glenn Drake-Owen, associate partner at Royton based Chartered Surveyors and property consultants Breakey & Nuttall, adding: “However, when we were able to start work again and re-commence listings and viewings, we found ourselves inundated with enquiries.
”At the time, Breakey & Nuttall were instructed to offer “For Sale” vacant retail premises on Yorkshire Street, Oldham, and had over20 parties wishing to view. Pre-pandemic, the agency would have carried out a block viewing spread over a two-hour period, but Covid and the conditions, restrictions and guidelines set out at the time, meant that the viewings had to be spaced over 30-minute slots.
This meant that Glenn spent almost a full day on site, showing people the property whilst keeping a safe social distance. Certainly a “new normal” and a guide to how viewings and other property inspections would have to be handled from then on.
Generally the property market has fared well during the unprecedented times of the pandemic, reports Glenn, but as ever, there are winners and losers in the differing property sectors,“ And, of course, this has mirrored the winners and losers in the trading sectors,” he points out. For example, industrial and warehouse units, and particularly those available “For Sale” have been clear winners. Everything Breakey & Nuttall has listed for sale has attracted multiple viewings, multiple offers, and has resulted in those properties selling at, or above, asking price.
Glenn explains: “Interest rates have been at record low levels for many years and a commercial property can offer an investor a much higher yield than a cash deposit, bond or financial product even with current high demand and low supply causing downward pressure on property yields.” “We are also seeing business owners, and particularly those in electrical, plumbing, building and allied trades, wishing to secure their own premises on an owner occupier basis, or through a SIPP or similar pension vehicle, and there appears to be a correlation with a high demand for these trades in the residential sector.”
A current example of this market are 2 warehouse and trade counter units, alongside Metrolink at Westwood, that Breakey & Nuttall and their joint agents are instructed to offer “For Sale”. There have been almost 50 viewings in less than two weeks, attracting almost 20 offers, many of which are in excess of asking price. Both units are now “under offer” and in the hands of solicitors.
Also, Breakey &Nuttall have recently agreed the sale of an older single storey industrial property, in Ashton town centre, that attracted multiple enquiries, viewings and offers in excess of the asking price. Those less fortunate, are the owners of town centre retail and office properties. The well documented “decline of the high street” had been affecting town centre property markets for some time but has been exacerbated by the pandemic and subsequent lockdowns with the vicious circle of empty offices and workplaces, and the enforced closure of non-essential retail, contrasting with a huge increase in online shopping, which in turn has been a driver in the expansion of the industrial and warehouse market.
In the main, reports Glenn, people appear to have returned, or are slowly returning, to the workplace, but there are still predictions that the office market could shrink by up to 20per cent. He adds: “A few months ago the predictions were almost 40 per cent, so sentiment is improving but there is definitely investor caution in the office market and there appears to be a shift towards flexible office accommodation, with flexible lease agreements, rather than standard three to five year minimum terms.
”In contrast to the pronounced weakening of retail market conditions in the main town centres, such as Oldham, Rochdale and Ashton, Glenn reports that, “Demand for retail space in suburbs and satellite towns and villages, such as Royton, Shaw, Lees and Hollins recovered quickly once non-essential retail was allowed to re-open, and in some locations is growing, particularly where independent businesses are able to take advantage of Small Business Rates Relief“ “I think that the pandemic helped some people re-discover their local retail offering and the reluctance to travel further afield has continued into this latter part of 2021” concludes Glenn, who is the retained letting agent for Royton Shopping Centre where he is happy to report “No Vacancies” despite all that the last 18 months has thrown at us.