Property market is booming again says LCP

Confidence is returning to the economy as manufacturers, retailers and distributors see orders begin to roll in again, says Andrew Preston, industrial property manager at Kingswinford-based London & Cambridge Properties.

And that means the commercial property sector is benefitting too, as an increasing number of firms are considering relocating or expanding.

Occupancy levels on business parks and industrial estates are rising rapidly. As one of the leading privately owned investment and property management companies operating in key locations throughout the UK, we are seeing a real upturn in business, which has resulted in us putting the 'full' sign up on a number of industrial estates in the West Midlands.

This year alone Dunstall Hill industrial estate in Wolverhampton, The Hill Top Estate in West Bromwich, Bescot Estate, Wednesbury, The Park Lane Estate, Oldbury, and Parkway Business Park, Tipton, have all signed up new tenants and are now fully occupied.

This can only be good news for the West Midlands economy as SMEs in the industrial and manufacturing sectors, as well as retail and warehousing and distribution trades, continue to grow and increase employment opportunities.

When the economy slowed down, LCP made the conscious decision to continue maintaining levels of investment in its portfolio of properties with an extensive programme of renovation and refurbishment. That commitment put us ahead of the game when it came to embracing the upturn in readiness for tenant enquiries.

The lack of new developments in the industrial and warehouse sector over the past five to seven years has led to a slowly diminishing supply.

If occupiers are unable to find a new property they will turn to secondary property, an area in which we consider a core part of our business

It is the reason why we have spent millions of pounds refurbishing property across our UK-wide portfolio of more than 15 million sq ft of commercial property, to protect our investment and ensure that would-be tenants can move in quickly.

We have always believed that we had to continue investing across our portfolio so that we were ready for the upturn. The successes we have seen in the last six months alone demonstrate that we were right to take that stance.

These are positive signs. The evidence has been growing over the past year and it appears that there is now gathering momentum with enquiries and deals.

We have seen an increase of 20% on our number of enquiries, which is a significant statistic, and voids have also dropped. Some properties that we have been vacant for a couple of years have recently been let to occupiers.

For example, just two years ago about 50% of the units on Dunstall Hill Estate, which is one mile north of Wolverhampton city centre, lay empty but LCP's commitment to reinvestment and refurbishment, along with an intensive management approach, has enabled us to attract several businesses to relocate there and the estate is now full.

In Wednesbury, EDMO, an aluminium fabrications company took on a five-year lease at Unit 1, Parkway Business Park – a 19,219 sq ft industrial unit – after being attracted by the location, being close to the A41 Black Country Route and just four miles from junction 1 of the M5. The company had looked at about a dozen units around Birmingham and the Black Country, but chose Parkway Business Park where LCP had spent £250,000 refurbishing the unit.

It's not just manufacturing that is thriving. Family-run business Serene Furnishings, one of the country's leading suppliers of bedroom furniture and beds, has taken on an additional 35,300 sq ft at Hill Top, West Bromwich, and now occupies 158,331 sq ft. It is now LCP's biggest tenant on the fully let estate.

In the first half of 2014, LCP let more than 200,000 sq ft, of industrial and logistics space in the greater West Midlands area. A further 150,000 sq ft is under offer. However, if all our properties that are currently under offer go through there may not be enough supply to satisfy all demands in 2014. Companies that are ready to expand usually want to stay in the same location but if the right premises are not there because of a lack of new development, secondary well-refurbished stock is always an option.

In an effort to begin to address the stock shortage, we have invested £1.5 million in our Progress Point development – a 21,000 sq ft warehouse and industrial scheme on the Pensnett Estate.

Further speculative developments, as well as design and build schemes are being considered for 2014/2015. The future for business in the Black Country – and for commercial property - is looking bright once more.