Vanessa Penn, Managing Director of Penn Commercial, gives her thoughts on the latest commercial property sector trends and developments...
Generally, the industrial/warehouse market is proving resilient in Suffolk, although the total number of industrial transactions is down on 2023. Typical industrial yields are circa 6.75%. Headline rents for new mid-box units are £11.25 per sq ft. The largest warehouse let was 1.2M sq ft at Gateway 14 in Stowmarket.
We are seeing headline rents in the industrial sector of up to £11.75 in Ipswich and £13.00 in Colchester (Easter Park). We are cautiously optimistic that inflation and interest rates will come down a little to meet two per cent targets on inflation in two years’ time, and all signs seem positive towards achieving this.
We also believe that yields should start to recover by the end of the year, and a lot of property owners are watching and waiting for interest rates to come down.
Penn is undertaking numerous site searches for clients for industrial/ warehouse space across the region. We are also starting to service enquiries from Sizewell C across the board for offices, training, outside storage and warehousing, as the project gathers pace. A typical example of this is a two-acre site sold at Needham Market, with 15,000 sq ft of industrial and offices for a training centre.
Freehold offices are proving popular, hence several sales at Suffolk Central in Stowmarket, and this is certainly a sector of the market where there is proven demand.
Retail remains challenging, although we were pleased to have let the 26,044 sq ft former Poundland in the town centre to an international supermarket operator, and a 4,000 sq ft unit on the outskirts of Stowmarket to Budgens.
We are still experiencing strong demand from drive thru and standalone food franchises, with some new operators coming into the marketplace.
We believe that, generally, the market will be a bit ‘sticky’ this year, with uncertainty on interest rates, the General Election and the economy as a whole, but that business should pick up in the Autumn.
We are delighted to have recruited Danny Kelly, who has considerable experience in property and facilities management, to further expand our offering to our management clients.
As a long term season ticket holder and recent sponsor, it’s fantastic to see ITFC promoted into the Premier League. This should provide a catalyst for more well known brands wanting to be represented in our town centre and promote further investment from property funds, who will now see this town as truly on the map.