Tim Hardwicke, SHW’s Partner and Head of Agency, comments: “The good news is that activity remains positive, both in the residential and commercial development markets, with developers being a little more selective, focusing on prime locations, unless there is a significant upside on considering non-prime.”
In London and around the M25, interest in ‘oven ready’ sites remains strong for residential development, with well-priced, unconsented sites also generating good demand, particularly in affluent towns. Developers’ current preference is for housing scheme over flats. In Sussex and Surrey, price sensitivity is the dominant market force with overpriced opportunities remaining unsold.
For commercial property, good demand continues for prime logistics sites, however price expectations are often higher than an appraisals will justify. Non-prime sites continue to transact but at lower levels and 80% of occupier interest continues to be storage and distribution led.
Tim adds: “Planning risk on commercial sites is an issue on sites, even those with an allocation, due to the increasing planning delays and red tape increasing development costs and frustrating developers. Sites with restricted planning or trading hours restrictions are having to be discounted due to less occupier demand. All new development schemes are aiming for EPC A / BREEAM Very Good or Excellent, due to occupier wishes and ESG requirements becoming ever higher in occupiers’ needs to fulfil contracts specifying ‘Greener buildings’.”