The turmoil in the financial markets has hit the property markets in regional cities like Bristol as well as in London, a report from DTZ has found.
Asset management to keep ahead of the downturn was now key, DTZ’s Money into Property report in Bristol found.
Tim Davis, head of the Bristol office, said: ‘Investors and property owners need to manage their assets efficiently to maximise income, occupiers need to asset manage their occupational premises to reduce costs, and lenders will have an asset management requirement to manage properties they have lent money on and now are in difficulties.’
In the office sector, DTZ found that take up for the first six months of the year had reached 370,000 sq ft in Bristol, in line with the ten year average. However there was a decline in the numbers of occupiers looking for more than 50,000 sq ft offices. Rents remained at £27.50, but incentives have increased.
DTZ also cautioned that just one of the three big speculative schemes planned – Cabot Gate, Bank Place and Finzel’s Reach – would begin construction in the near future. Property Week revealed that Finzel's Reach was one of the only speculative schemes in Bristol to be on site earlier this year (22.08.08).
Eight major deals have completed in the last year in the south west and south Wales, DTZ found, and five speculative schemes are under construction totalling more than 1.5m sq ft in total.
DTZ said freehold values were set to reduce by 20% and land values by 50%.
Retailers were still taking space, DTZ said, but requirements had fallen and incentives had increased.
Cabot Circus is also due to open this week in Bristol, which will double the city’s existing retail provision.
House prices are falling at their fastest rate since the early 1990s in the region, DTZ found, and further falls are expected.