Kalmars

KALMARs Commercial

Jamaica Wharf, 2 Shad Thames, London SE1 2YU
Telephone: 020 7403 0600  |  Fax: 020 7403 1301    Email: info@kalmars.com

KALMARs Residential

Unit 1, Bickels Yard, 151-153 Bermondsey Street, London SE1 3HA
Telephone: 020 7940 7980    Email: residential@kalmars.com


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Market Commentary

Market Commentary

OCTOBER 2007

Following a strong first half of 2007 problems emanating from the United States have resulted in more caution than hitherto. However our database of applicants has actually grown during September and barring certain sectors such as investment the markets remain strong.

These markets are described hereunder

Offices

The market remains steady with sales in good demand and lettings also moving reasonably quickly. Although there has been some growth in rents and capital values they have not seen the frenetic growth that some areas have experienced are and therefore less volatile. Capital values remain around £400 a square foot for quality conversions (on non international standard offices); rents vary from around £45 a square foot at More London Bridge through to generally around £25 per square foot in the Bermondsey Street area, but remain low at £12 to £17 a square foot outside of conventional office locations. There is a relative shortage of supply compared to demand, providing the economy remains stable there should be growth during the course of next year.

Industrial

Industrial demands remain steady with a very limited supply of good modern properties and hence capital values exceeding £200 a square foot and rents of £14 a square foot for high tech units. The Glengal Business Centre development with around 90,000 square feet is now letting/selling well a few months after practical completion and estates such as the Bermondsey trading estate (which comprises 35 units) has minimal availability.

Retail

Demand remains good for units in reasonable positions and is particularly strong for A3 catering, A5 take away foods. Tesco's Metro are particularly aquisitive and betting shops cannot get enough space. Rents for lock-up shops in non prime positions are around £15,000 per annum or £30 per square foot rising to £70 if for prime space.

Residential Sales

Following the expected traditional summer holiday lull, we have experienced increased activity throughout September and into October. Demand remains strong with both the new build and re sale markets performing well.

The development and regeneration of SE1 and wider Southbank continues apace and confidence in the area is high from both the investor and owner occupier sectors.
In addition, areas of activity worthy of note include : Elephant and Castle as the regeneration begins to pick up some real momentum. Deptford and New Cross which has seen significant investment now translating into reservations and Camberwell where some interesting large scale schemes are planned.
New build property prices for Bermondsey Street and Borough:

Type Size (SQFT) Price (£)
Studios 400 230,000
One beds 550 330,000
Two beds 700 420,000
Three beds 850 495,000
2 / 3 bed Penthouses 1,300 735,000

Residential Lettings

Rents in the Bermondsey area started to rise approximately 18 months ago. Landlords had started selling their buy to lets partly because yields were low, and also because many reckoned it was a good time to cash in. First time buyers were putting off buying because they either could not afford to buy or were concerned about rising interest rates and the danger of negative equity.

So at the moment there are a lot of people chasing available rental property. The market is skewed by the number of new "luxury" flats, but for other sorts of property, including cheaper flats or family sized housing, the demand is rising but there is almost no new supply. Property is in big demand especially in desirable locations i.e. Shad Thames, Bermondsey Street and Borough Market areas.

New build property rentals per week are approximately as follows:

Type Size (SQFT) Price (£)
Studios 450 230
One beds 500 290
Two beds 750 400

Contacts

For further information about the above please contact the following:

Development Donald Walsh donaldw@kalmars.com
Development Vince Cheung vincec@kalmars.com
Larger Offices Adrian Gurney adriang@kalmars.com
Offices Gareth Dominique garethd@kalmars.com
Industrial David Doran davidd@kalmars.com
Retail Wez Mansfield wezm@kalmars.com
Residential Branch Manager
Jonathon Miller jonathonm@kalmars.com
Residential Sales Oliver O'Donovan olivero@kalmars.com
Residential Sales Matthew Booker mattb@kalmars.com
Residential Lettings Mick Down mickd@kalmars.com
Residential Lettings Caroline Matusik carolinem@kalmars.com

These details are believed to be correct, but we cannot accept any liability whatsoever for any misrepresentation made either in these particulars or orally. All interested parties are therefore advised to make their own enquiries to check these particulars prior to placing any financial or other reliance on this information.