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Midlands Property Predictions 2014

​JLL hosted its annual Midlands Property Predictions event on Monday 20 January 2014 at Birmingham Council House.

Following an economic overview by Jon Neale, Head of Research UK, The Question Time Event was chaired by Jan Thompson, Midlands Chairman.

Featuring a panel of experts from the Birmingham and Nottingham offices and guest panellist Ian Taylor from Marketing Birmingham the experts responded to questions from the audience across a variety of topics.

Our overall predictions for the year ahead are detailed below.

Industrial & Logistics

C​arl Durrant, Director, Industrial & Logistics

"Some of the speculative industrial units now being built, of which there are three currently under construction in the Midlands, will be pre-let before practical completion.  There is presently not enough land supply - we need at least 100 acres near Birmingham to cater for future industrial demand."​

Offices

Jonathan Carmalt, Director, Office Agency​

"There are currently only two buildings in Central Birmingham that could cope with a 100,000 sq ft occupier and we anticipate that existing office stock will run out in the next two years.  With a potential supply lag looming, we forecast that the West Midlands office market will see a prelet of no less that 50,000 sq ft this year."​

Real Estate Workout

Simon Hunt, Director, Real Estate Workout

"Looking at the debt mountain that sits in UK commercial real estate; the latest De Montford University research estimates that around £40bn remains in the "distressed" zone.  This year we expect more sales of Midlands's properties within loan portfolios which will unlock more buying opportunities.  Secondary industrial stock will continue to come to the fore and we expect to see more distressed stock in sectors such as pubs, hotels and healthcare."​

Investment

Allan Wilson, ​Director, Capital Markets

"The second half of the year will be more expensive than the first and funds will commit to speculatively develop distribution space. Yield compression will continue into 2014 although this will not be as aggressive as last year; it's all about sentiment and confidence.  Perceptions of risk have changed and investors are becoming more willing to take on risk so yields in secondary markets should move more than prime. The secondary markets, alternative sectors and distressed portfolios will be the big opportunities in 2014."​

Residential

Michael Brough, Director, Residential

"The government's Help to Buy initiative bolstered house sales in 2013 and will continue to underpin volume house builders' sales in 2014. Birmingham City Centre apartment stock is now at an all-time low – this year we expect to see a significant residential scheme coming out of the ground in the city centre."​

Retail and Leisure

Richard Brown, Director, Retail and Leisure

"We will continue to see polarisation in the retail market – the definition of secondary retail has widened and prime narrowed.  As Birmingham re-establishes itself as a dominant regional retail destination, some of the surrounding centres will see a charge in tenant demand to a more convenience led focus, and this may affect inward investment.  Secondary towns need to work with local authorities to respond these changes otherwise we could see 'zombie towns' arriving quite soon."​

East Midlands

Mat Smith, Director, Nottingham​

"Nottingham is set to be the star performer this year with the completion of the tram extension and train station refurbishment set to significantly enhance the city's offer. Looking at the office market, we anticipate take-up this year will top the five year average which will be double 2013 levels.  We will also see office rents start to harden and a reduction in incentives being offered by landlords."​