Welcome to our Industrial Market Update | July 2023
As we head into the second part of 2023, the market is still experiencing slower sales activity and buyers are being hampered by stricter banking requirements.
With CPI inflation at 6.7%, the OCR at 5.5%, the unemployment rate at 3.4% and rates continuing to rise both domestically and internationally we have yet to see the bottom.
We are in a period of uncertainty, and it is difficult to say how long this will continue but it is a good time to work smarter, implement realistic budgets, cut down your overheads, control your margins and get ready to go again.
How is this affecting our market?
From a leasing perspective, there is still a lack of stock with vacancy at less than 1%, however in the smaller to medium market we are seeing landlords being a bit more flexible with rental rates as the short to medium term is still uncertain.
Larger warehouses are receiving less enquiry as established tenants are typically on lower rates than either newly vacant buildings or new buildings. If you have a larger vacant building it may be time to incentivize prospects to be more competitive.
From a sales perspective, we are finding that a large portion of properties on the market aren’t getting transacted on the deadline date but are still transacting later and below initial asking prices. There are less Owner Occupiers looking to purchase and the Investor appetite for risk has shifted yields upward.
There is some optimism we will have a change of government in October; please can we remind you all to vote.