Demand for industrial sites in the East soars despite economic difficulties

17:04 August 10, 2022

Commercial estate agents in the East of England are celebrating a slew of new offers as a healthy dose of demand continues to support the market.

Despite dire economic forecasts as the cost of living crisis rages, demand for industrial/warehousing units outstrips supply in Norfolk and Suffolk – and the effects of pent-up demand that led to the recovery the office market after the pandemic last year are still being felt, according to the latest figures.

The latest EG Radius rankings for the quarter to the end of June show Bidwells topping the regional performance chart for closed business deals as it negotiated nearly 46,000 square feet of office space and nearly 138,000 square feet of industrial space. Penn Commercial of Ipswich tops the regional rankings for retail transactions at nearly 14,000 square feet.

Across all counties, Bidwells completed 11 commercial real estate transactions, followed by Arnolds Keys at 10 in Norfolk during the second quarter. In Suffolk, Penn Commercial and Fenn Wright are tied with 12 deals each in Suffolk. Fenn Wright topped the Essex table with 39 trades.

Will Jones, who leads the sales team at Bidwells Norwich office, said it was “always nice” to top the charts.

A deal in which Marsh Insurance Company took over what was Aviva’s offices at the city’s Willow House in Broadland Business Park meant a mega 62,000 square feet of office space was negotiated in one single deal earlier this year. A total of 110,000 square feet of office space had been traded in and around Norwich so far – putting the year on track for highs in 2021 when 192,000 square feet was divested.

William Jones in Bidwells Norwich office commercial property team
– Credit: Bidwells

“We are back to pre-pandemic levels, he said. Hybrid work has given a post-pandemic boost to the market which crashed in 2020 amid lockdowns.

“The industrial market in Norfolk, Suffolk and Cambridgeshire over the past two years has reached record levels with many delivery companies and online companies all wanting space,” he added. Speculative projects were hard to come by, which meant steep rents at Diamon Point in Norwich and Cranes Business Park in Ipswich after developers sold them to new owners Northwood Investors, he said.

He predicted the commercial property market may not see rents rise amid the latest economic turmoil, but added: ‘At the end of the day, people have to go about their business.

Vanessa Penn, Managing Director of Penn Commercial, said: “We have seen a slight resurgence in the office market – where we were also named third in the East of England – and the second quarter saw a number of retail transactions come to fruition.

Vanessa Penn, center, and her team at Penn Commercial in Ipswich

Vanessa Penn, center, and her team at Penn Commercial in Ipswich
– Credit: Penn Commercial

“As plans around Sizewell C begin to gain momentum, following the Government’s granting of the Development Consent Order for the project on 20e July, an increase in demand in the industrial sector is expected in the coming months.

“The project will fuel the business of contractors and ancillary services seeking warehousing, hard and off storage for the duration of the contract.”

Michael Moody, Partner at Fenn Wright, said of his company’s performance, “This is a fantastic achievement and a testament to the experience and outstanding performance of the team of professionals here at Fenn Wright. We remain focused on the success of our business throughout the Essex and Suffolk markets and will continue to provide unparalleled service to our customers”

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