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News Release

Birmingham

Stability – But Not a Vintage Year

Predicts Jones Lang LaSalle's Midlands team


Birmingham, 23rd January, 2012 - Financial pressures on developers should start to ease during 2012 in two key sectors, according to a heavyweight team of analysts assembled by Jones Lang LaSalle in Birmingham today.
 
Chaired by Jones Lang LaSalle’s regional chairman, Jan Thompson, the agency‘s Midlands ‘Property Predictions’ event heard industrial specialist Cameron Mitchell suggest that spec funding for sheds in the sub-30,000 sq ft niche could return as the year unfolds.
 
Investment director Allan Wilson was bullish about prospects in the industrial sector, saying there was funding available for pre-lets, where the lease and tenant are right.  However, the sweet spot is small, and the number of potential funders reduces at lots of less than £10 million,” he added.
 
The city centre market held up well during 2011, thanks to a buoyant Q4 which took the annual lettings total to just under 670,000 sq ft.
 
Jon Carmalt, Jones Lang LaSalle’s Birmingham offices director, doesn’t see such a strong performance for 2012 though, predicting that demand will most likely ebb to between 550,000 and 600,000 sq ft, given the current dearth of chunky requirements.  
 
Preliminary work on the Snow Hill-New Street Metro line starts this year, and Michael Brough - who heads the Birmingham residential team - told the event “significant improvements in city centre infrastructure” would be needed to drive the city centre market back towards its 2006 peak.
 
“Residential development land is still in demand, but the parameters are very specific, primarily for between 30 and 50 units, on sites of 2-5 acres, with planning permission,” he added.
 
Matt Smith, director at Jones Lang LaSalle’s Nottingham office, gave an overview of the East Midlands; predicting an increased emphasis on ’design & build’ in the industrial sector, with take-up in the office market not shifting too far from 2011.
 
Andrew Burrell, Jones Lang LaSalle’s national head of forecasting, admitted 2012 would “not be a vintage year for rental growth, especially in the difficult early months.”
 
He expects much greater rental stability, across all commercial sectors, but believes that incentive packages will remain generous as landlords tussle for tenants.
 
Nick Webb, from Jones Lang LaSalle’s retail team in the Midlands, believes the trend for ’clicks and bricks’ operations will continue, and sees an increasing polarisation between prime and secondary space on the High Street.
 
Peter Leaver, Jones Lang LaSalle’s lead planning director for the region, is optimistic that the simplified planning requirements for Enterprise Zones (EZs), and the concept of Local Development Orders, will ultimately drive employment growth.    

Ian Cornock, Jones Lang LaSalle’s head of office in Birmingham, also believes that EZs and Local Enterprise Partnerships will make a positive impact on the property market, and at a local level, for example, the outline business case for Paradise Circus has already been approved by Birmingham City Council.