C2S talk to Simon Tothill, Property and Development Director, Robert Hitchins Ltd, about his expectations for 2022 for Commercial Property
Investment in commercial property is very much on the agenda as we head towards 2022 experiencing significant investor activity.
There is a large amount of money available but relatively few opportunities. This is driving values up in many cases, whilst yields head ever lower.
The buoyant state of commercial property investment is being led to a large extent by marked growth in two particular sectors: manufacturing and distribution, and medical and pharmaceutical. Calls for more research and new medicines as a result of the pandemic are driving those sectors forward.
Historically low yields are being achieved for modern industrial units in well-located positions and this, combined with ever-increasing rents, is fueling the market. Robert Hitchins’ forthcoming developments at Innsworth Business Park in Gloucester, Stroudwater 13 at Stonehouse, and Westgate at Severnside, Bristol are generating significant interest.
The office market remains slightly confused as occupiers consider different working models – whether that’s working from home, returning to the office or opt for a mix of the two. That said, Robert Hitchins is experiencing a growth in occupier enquiries, and we expect this to increase in 2022.
The format of the office fit out is changing with greater focus on creating an environment which offers opportunities for collaboration and wellness.
As ever, investor appetite remains good for the right building in the right location with good quality tenants. We are experiencing strong interest from potential occupiers in most of our buildings within the Robert Hitchins portfolio and in particular at the Hatherley Place development in Cheltenham, close to GCHQ. This 32,700ft² office building can be delivered quickly given that planning permission is in place and no additional infrastructure works are required.
The retail market continues to evolve as the impact of COVID-19 and the increase in internet shopping influences the sector. The high street will continue its transition towards less traditional shopping with fewer multiples and an increased number of independents (assuming the business rates fiasco can be resolved) and a greater mix of leisure, community and residential uses. The high street will however remain a vital community hub.
Out-of-town retail will maintain its appeal and leisure-related sectors such as retail outlets will also thrive as people seek to combine their leisure time with a shopping experience based on the promise of attractive brands at discounted prices.
Our Cotswolds Designer Outlet and Dobbies Garden Centre at Junction 9 of the M5 motorway continues to generate firm interest from several exciting brands, and the infrastructure to deliver this major development is ongoing.
It all makes for exciting times for Robert Hitchins who continue to invest and deliver buildings to occupiers throughout the South West and South Wales.
