"The rise of the small business could also see a shift in interest in ownership of commercial units across all classes"
A focus for the year ahead will absolutely be on the care sector and its wider network. From expanding care home operators delivering the likes of dementia and palliative services, we could also start to see a rise in a new form of care home specialising in long Covid health problems.
We will be watching closely to see how and where that care will be provided, whether that’s extensions to existing sites, new-builds, or converting and adapting of existing vacant properties such as offices, pubs, or hotels.
The wider network of PPE manufacturers and suppliers, in addition to the tech companies and laboratory spaces working on health, should also promote demand for commercial units.
The market is also seeing demand for smaller commercial spaces from online and home-based businesses that have thrived during the pandemic. Any issues around supply to meet that demand could be tempered by business owners getting together to create ‘home business hubs’ in larger units.
The pandemic has led to a real appetite, and in some cases a need, for office and retail units that are away from the more traditional town and city centre commercial hubs – and this is something that I believe will continue this year. As a result, we are seeing an equalisation of property values and rental incomes in outlying areas of towns and cities, and in rural areas. The knock-on effect is positive for pub owners and operators, with fewer coming onto the market than in recent years, as business sales, residential conversions, or as development sites.
However, achieving any necessary change of use to existing stock will require councils to work harder to clear a backlog of applications that are sitting with them, a real frustration remains about how slow this process is currently and the effect that it is having on the market.
The rise of the small business could also see a shift in interest in ownership of commercial units across all classes, with signs of a shift in the number of properties owned by individuals rather than investors, as the former look to take advantage of low interest rates to buy properties they are currently renting, whether that’s for their own pension funds or to create more flexibility for their business expansion.
Supply chain issues over the past 12 months due to a combination of the pandemic, Brexit and the blockage of the Suez Canal last March are pointing towards a resurgence in UK-based distribution/warehousing market. These difficulties that affected a wide range of sectors throughout the year are expected to provide further stimulation to a market that is already seeing an increase in enquiries about larger industrial sites, according to Propertymark’s commercial members’ survey for the final quarter of 2021.
Alongside this, commercial property and business buyers will also be re-evaluating their portfolios and investments as well as considering the evergreen nature of future acquisitions so they can weather any lockdown storms of the future.
