Property experts are predicting a bright new year for Birmingham and believe an air of optimism has returned to the retail sector in Britain’s second city.
Chartered surveyors Johnson Fellows say the city has recovered from the “perfect storm” of financial meltdown which wreaked havoc throughout the UK’s retail property sector and led to the depressingly familiar sight of empty shop units.
As we approach the beginning of 2011 it appears that the worst may be behind the commercial and retail property sector, according to Nick Wint and Chris Gaskell.
The partners at the Birmingham-based company say that pieces of the city’s property jigsaw are falling into place nicely and are confidently predicting a brighter future.
Nick, partner in the landlord and tenant department, is upbeat about the city’s prospects. “Some people say that once the public sector cuts and the increase in VAT kick-in we could be in trouble again. I can see their point of view, but I think conditions are such that the market will prove to be far more robust than many people might imagine.
“I believe there will be a flurry of activity in the sector before Christmas and things will continue to improve throughout 2011. Commercial lending is improving again. Banks don’t like uncertainty but I would say that things in the marketplace are improving in that respect.”
He added: “Looking back, the first signs of the market cooling appeared in 2007 and the next two years were a real mess. The retail property sector was hit by the perfect storm with the uncertainty created by the run on Northern Rock, the credit crunch, the banking crisis and the failure of some major High Street brands.
“But the good news is that conditions have improved dramatically. Many landlords have refinanced, they are more secure, while weaker players have pulled out of the market. Value retailers are performing really well as are some premium brands. During recessions, the market is the first to feel the downturn and then it appears to lag behind when the economy improves because deals can take a long time to negotiate.
“What is apparent now is that while some of the weaker retailers have fallen by the wayside, the stronger companies are posting some great figures. There is a lot of positive news coming out of the sector. There are a lot of cash-rich investors out there and this is a fantastic time for people to invest in property.”
Chris is partner in the High Street agency department of the company which acts on behalf of some of the UK’s best known brands including supermarket giants Asda, leading chemists Boots and mobile phone specialists Phones4U.
He said: “Despite the current economic climate and the public sector cuts announced by the Government recently, I believe Birmingham has much to look forward to next year. Over the years Birmingham has had to reinvent itself and it is set to do it again.
“The first piece in the jigsaw was the new Bullring shopping centre which pushed Birmingham up to the UK’s top ranked centre outside London. There is a number of other major redevelopment schemes planned which will further consolidate Birmingham’s position as one of the premier retail destinations in the country.
“The planned redevelopment of New Street Station is long overdue and will, without doubt, improve communication to and from the city, making a fantastic gateway to the heart of the retail core.
“JLP are in discussions to be the anchor in the £600m redevelopment, taking a reported 300,000 sq ft department store. This forms part of Birmingham City Council’s ambitious Big City Plan – which is the blueprint for the regeneration of 2,000 acres of city centre land. Over the past three years over £1billion of public investment in the city centre has been committed as part of the Big City Plan through various developments and schemes.”
Whilst some commentators have predicted that the impact of the Bullring would sound the death knell of the more traditional retailing shopping zones such as Corporation Street, New Street and High Street, this has proved not to be the case.
Recently, Phones 4U and H&M have shown their confidence in the city centre by taking additional stores in close proximity to their existing outlets. Phones 4U took the former Goldsmiths unit on the corner of Corporation Street and New Street, one of the most prominent retails units in the city, in an off market deal, which again demonstrates the demand for prime units in the location. Johnson Fellows dealt with this transaction
“While the rest of the country’s major city centres are bracing themselves for tough times ahead, Birmingham has much to look forward to. The outlook for the city is bright, with the continued support and investment from the Council and the private sector, and with the continued confidence of retailers in the retail market in Birmingham, things are now looking up,” he added.
Given the positive outlook for the retail market, Johnson Fellows has appointed Stuart Bridgewater to bolster its High Street Agency Team. Johnson Fellows has been a leading High Street agency for 20 years, working on acquisition and disposal instructions for England and Wales. The company has assisted in the expansion of retailers from their initial units through to being National Multiples.