Property Interest on the Rise in AngusNeil Hardie
Over the past decade there have been various pressures on the industrial market in Angus.
These include economic factors such as the downturn in the oil and gas sector, which had a knock-on effect locally, bringing increased space to the market and a reduction in the number of participants.
This put downward pressure on rental and sales rates across many Angus towns, particularly for the larger properties of an older nature.
There have been political factors too, including the Scottish independence vote, Brexit and most recently, the lockdowns and uncertainty brought on by the pandemic.
Since the market reopened after the first national lockdown, it has functioned well and there has been a gradual take-up of space as businesses reposition themselves to better serve their customers and markets. In some parts of Angus, stock levels are now very low.
Forfar, the administrative centre for the region, is a particular sub-market that is encountering very low vacancy rates of industrial/light industrial/storage accommodation at the moment.
This is proving beneficial to sellers in the market or landlords seeking replacement tenants for vacant space, and is positive for rental and capital growth.
But these circumstances can also be negative for businesses seeking to relocate to alternative space to improve operational efficiency and grow – and can place planned expansion and job creation on hold.
Good properties being brought to the market are being reoccupied quickly.
A typical example would be the recent marketing of a property in Carseview Road, Forfar, comprising a store and workshop, with an adjoining office and secure yard.
It was brought to the market in February this year. Terms were agreed and the property was let and reoccupied at a rent in line with expectations within three months.
Market conditions, should they persist, may stimulate some property/land owners to consider refurbishment and/or sub division or new-build to safety requirements.
Meantime, prospective purchasers or tenants are having to adapt to secure space.
Businesses are taking occupation of properties that require considerable repair and adaption and which would otherwise have been overlooked, and there have been acquisitions at prices that may not have been achievable in previous years.
In the absence of available space, tenants have made approaches to landlords to create additional accommodation through development or estate management.
In some instances, this has caused landlords to open discussions to explore selling to existing tenants and take advantage of sales at favourable prices.
Meanwhile we have also seen a business acquire a property from a landlord to take up occupation at a later date when the existing tenant lease came to an end.
We are also aware of cold off-market approaches by businesses making unsolicited offers to building owners.