The commercial property market is on the up again
- Credit: Archant
Devon Life Business & Professional expert DAMIAN COOK, who is a Director at Stratton Creber Commercial in Exeter. will give his analysis on the Commercial Property market in the county and a guide to buying your property in 2015
The first quarter of 2015 has seen improved confidence resulting in an increase in activity within the commercial property market throughout Devon. Exeter in particular is experiencing substantial growth and has become the South West’s most vibrant commercial hub.
Demand for both industrial and business space remains healthy with agents experiencing a shortage of current supply, which has not been helped with the lack of new development over the past seven years or so due to the challenging marketing conditions during the recession.
This will be eased with the future development of Exeter Science Park and the nearby Skypark next to J29 of the M5, although with little physically under construction these locations will not bring new supply online this year.
Retail trends are changing with the impact of the internet so the High Street is adapting to this by providing a shopping experience with a surge in national retail chains seeking and securing a position in the city centre. The variety of places to eat for both shoppers and workers is now vast.
An ambitious vision to deliver a unique dining destination in the Exeter Guildhall shopping centre will provide artisan restaurateurs with the prefect space to offer even more choice providing 13 more outlets.
The Royal William Yard in Plymouth has for some time been a popular destination for food and leisure with independent and national restaurant operators including River Cottage, Bistro Pierre, Prezzo and there’s more to come.
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More good news for Plymouth is the sale of the Civic Centre to Urban Splash. Although no plans have been made as yet, the 15-storey Grade II listed building is ripe for a mixed commercial, leisure and residential development.
Developers have been taking advantage of recent changes in permitted development rights which allow offices - except for listed buildings - to be converted into residential accommodation without the need for planning consent. Some 60,000 sq ft in Exeter’s central business district of Southernhay within five modern office buildings are currently being converted into luxury flats for sale and to rent. In Plymouth where the end values are not so viable, developers are carrying out a similar exercise for student accommodation with the recent sale of Royal Buildings at St Andrew’s Cross.
The expansion of residential accommodation within Exeter and Plymouth city centres is following the trends of larger UK cities and it is yet to be seen what the impact will be on the office sector and whether we see more out of town schemes. Occupiers within all the commercial property sectors are starting to look again at securing new premises as the economy improves and business in Devon begins to look healthy again.
Buying Commercial Property in your Self-Invested Personal Pension could be one of the best decisions you make with the new legislation which comes into affect from 6 April 2015 where you can take the entire fund from age 55 (taxed as income). Or, should you die before age 75 the fund would be paid out free of income tax even if you have started drawing an income.
There are some great advantages buying commercial property in your SIPP as there is no capital gains tax on the fund, one receives tax relief on the contributions and you can take 25% of the fund tax free once you are 55. In addition to those benefits any rent generated from the commercial property held within your SIPP is tax free.
However there are drawbacks and tenants may vacate so you will have a rent void and potential liability to pay empty rates, building insurance and keeping the property in good repair whilst you look to secure a new tenant. I recommend you take independent financial advice to discuss the pros and cons and if happy then start your search for suitable commercial property. It could be your future!