Commercial real estate developers predicted to find success

Office design news from Morgan Lovell

Published on 17-03-2010

Companies that speculatively develop new commercial real estate could find that they are able to meet with "considerable success" as the market begins to gain pace in the coming months.

Business space advisory firm CB Richard Ellis (CBRE) explains that, in the recent economic climate, there has been a tendency for many organisations to focus on their existing property portfolios.

However, with development finance difficult for some companies to access, a subdued desire to construct commercial real estate from scratch could lead to a diminished supply of space as markets recover in 2010.

Paul Farrow, head of CBRE's UK industrial agency, says: "We believe that the first developers to make the commitment to speculatively develop will find considerable success due to the lack of new product on the market."

The company's observations focus primarily on industrial spaces, such as warehouses, but a similar lack of supply in the office space market could also prove beneficial to companies willing to create suitable properties.

CBRE recently noted a particular lack of large-scale office interiors in London, with a short supply of spaces over 100,000 sq ft leading to increased rents in the capital.

Posted by Paul Kelly.