It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Richard Heslop, director of the Ilkley-based commercial property consultancy DE Commercial.
The outlook for 2023 will be dictated by the macro economic factors of interest rates and inflation, together, and the ongoing global impact of the Russia Ukraine war.
The first half of 2023 is likely to follow a similar pattern to the last quarter of 2022 which was dominated by rising interest rates and prices.
Interest rates will level out during the first quarter and the government will start to bring inflationary pressure under control. Once these 2 tigers have been tamed, certainty will return and the economy strengthen. Prices, particularly in the construction sector, will stabilise as the supply chain issues of the last 12-18 months recede.
What will all this mean to the commercial property market?
The success of the retail sector is dependent on location and type. Consumers still need groceries, to buy coffee, have beauty treatments and purchase medicines. Well located and diverse retail areas will continue to thrive. Elsewhere re-purposing of retail will gain momentum as investors and developers respond to the ever changing habits of the consumer.
The future of the office market merits further discussion. The emphasis must be on improving the office environment through add on facilities such as outdoor space, childcare facilities and on site catering. This will bring workers back into town centres and the work place.
The continued growth of ecommerce will again drive the industrial/warehouse sector as companies strive to deliver the product to the consumer through ever faster delivery time from order placement. This is the ongoing challenge for suppliers.
Where will the opportunities lie in 2023 for investment? Funds and corporates with strong balance sheets will be able to take advantage of those companies who have over leveraged and need to offload to shore up their financial position.
