Commercial market: Supply shortage results in rent increases in central St Albans
- Credit: Archant
This week’s Expert View comes from Matthew Bowen, Director, Aitchison Rafferty
Brexit has come and gone and the dust seems to be settling somewhat, albeit we are all waiting to see what the long term impact will be.
Certainly it doesn’t look like we will know for a few months - if not years - but, following the result, at least the decision is known and life and business needs to go on.
There is still a chronic shortage of available properties in the urban areas of St Albans and Harpenden and in St Albans we have let almost all of the vacant retail units we have and in total I would be surprised if there were more than 1–2 per cent vacant in the City Centre in total.
Office and industrial property availability is also at historically low levels and the consequence is that rents are maintaining their high levels if not increasing. This impacts not only on those looking to move into an area but for those already there.
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Moving around is harder, and for those with a rent review or lease renewal the uplift in rent from 3–5 years ago can be eye watering.
Aitchison Raffety not only deal with property disposals but rent reviews and lease renewals for landlords and tenants and it is imperative landlords and tenants consider the impact as soon as possible.
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In one St Albans city centre building split into eight suites, there are rent reviews and lease ends all within the next 12 months, and rents previously set at £16 per sq ft have now risen to £25 per sq ft, which represents a 60 per cent increase.
Tenants may need to consider moving or certainly budgeting for the increase and landlords need to consider that tenants with lease renewals may need to vacate.
As we deal with all commercial property matters we can assist all parties but we cannot change the market which now means higher rentals have to be paid by tenants.
It is a positive sign for the economy and the local urban areas but does come with its own challenges.
For more information, please contact Matthew Bowen, Aitchison Raffety, on 01727 843232.