FARM land, prime residential property and potential sites for food, value and luxury retailers remain the most resilient property assets in the East Midlands, according to Savills, the international real estate firm.
The news was revealed at an event held by Savills Nottingham, where over 200 key movers and shakers of the East Midlands property scene came out in force.
Some of the UK’s leading experts on the residential, commercial and rural property markets were on hand to offer their insight, including Savills’ commercial research director Mat Oakley, residential research director Lucian Cook and rural property director Jonathan Morgan-Smith.
Mr Oakley, Commercial Research Director at Savills, discussed how the commercial market in the area has evolved in 2011, naming ‘snow, riots and a lack of consumer confidence’ as key factors for the restricted growth in the sector.
He also questioned whether ‘refurbishment could be the next redevelopment’ for offices and commercial space in the region, whilst advising that Grade B property, or those buildings that are not classed as prime sites, could present opportunities for investors. He added that there are still pockets of growth which are driving the market, namely ‘luxury, value and food retail’.
During the event Jonathan Morgan-Smith, head of the rural team at Savills, highlighted how the farm land property market has ‘considerably outperformed all expectations over the last decade’.
He described how average prices in the East Midlands for an acre of grade three arable land is now £5,500 and how grade one arable land can reach £7,000 an acre in some places.
In 2001 the average East Midlands price for an acre of grade 3 arable land was just £1,800 per acre. He concluded that prices would flatten over the next few years, yet issues such as ‘constrained land supply, food security and commodity prices’ should ensure a resilient land market.
Lucian Cook, Savills residential research director and possibly the most quoted man in property, gave his overview on the residential and development land market in the East Midlands. He cited that a lack of available finance was causing issues across the board for first time buyers, while equity rich areas were helping to keep house sales figures buoyant.
He also described how the housing market has changed since its peak in 2007 to mean that more new households will be in the private rented sector. He also described how a lack of residential development land in the North will lead to a ‘severe shortage’ of housing if this isn’t addressed.