Start-ups need more space
START-UP companies expanding into larger premises are giving a shot in the arm to East Yorkshire's commercial property market, according to local agents.
And while some have reported a drop in enquiry levels, the conversion rate is proving much higher than in previous years, suggesting those companies that do begin searching for a new home have a serious appetite to move.
Garness Jones this week reported a surge of deals within the office market, and over the past four months has handled enquiries for more than 85,000sq ft of office space.
Director David Garness said: "While there may have been a degree of caution in the past which has prevented firms from expanding, I think the requirements we are seeing now from companies are being driven by growth.
"Ultimately they need to grow to meet client or customer demand, and there is now more focus on quality working space.
"It is good businesses are now more focused as there is not a huge amount of stock.
"We are finding many businesses entering the market expecting there to be a lot of stock and subsequently being surprised that there isn't.
"There has been very little development over the past four or five years, and levels of demand against availability may well affect the market unless more quality space is created."
PPH Commercial's website also reveals a significant flurry of activity in the office sector, as well as industrial. Nick Pearce, of PPH Commercial, said: "The main trend we are seeing at the moment is the smaller start-up end of the market – both industrial and office – picking up significantly.
"That is the area that was previously giving us the most amount of concern as smaller companies expanding and relocating stimulates the market and enables larger companies to do the same.
"Ultimately we need activity at the smaller end of the market to push that through and, after a tough two years, we are seeing that happen."
Mr Pearce said more smaller companies were balancing their concerns about the current climate with the need to grow their business, and this was giving them the confidence to take advantage of the opportunities to grow.
"A number of smaller companies have been nervous about committing to a move, but have found sharing accommodation or working from home is no longer suitable for them," he said.
"As a result, some of our serviced office centres are filling up very quickly which is great.
"The levels of enquiries are down but the conversion rate is much higher than before.
"If you go back four of five years for example, we saw higher levels of enquiries but did not see as many conversions as a result.
"We are still seeing a number of companies relocating from older premises and expanding into new ones, and this is freeing up opportunities for smaller but growing firms."
Tom Cooper, of Scotts Property LLP, said following a relatively mixed 2012, the practice was now seeing "a good deal of optimism".
He said: "We have noticed a surge in enquiries for both industrial and office properties and have a had a really busy January and February, with a lot of industrial deals in particular being completed.
"I think towards the end of the year, people have been putting off decisions and taking some time to reassess their operations and see where they would like their business to go.
"This is now translating into increased activity."