The Business Exchange Swindon & Wiltshire November 2014 | Page 17

COMMERCIAL PROPERTY

PROPERTY IN A CONSTANTLY CHANGING WORLD
Working in the property industry provides a great insight into many business
sectors and the challenges they face. For property advisors, the better we
understand our client’s business, its objectives and the property related
barriers to achieving these, the sooner we can find the solution and the
route to achieving it.
Such challenges can range from
those faced across a business
sector to those which are
company specific. In this article
we look at the former - the
impact of changes within two
particular business sectors due to
structural developments and the
wider economic influences.

Food Retail
The structural change currently
taking place in the food retail
sector is unprecedented over the
last 30 years, with the previous,
seemingly inexorable, growth of
the ‘big four’ (Tesco, Sainsbury’s,
Asda and Morrisons) now in
reverse. Figures show that the big
four dominance peaked in 2011
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with a market share of 81%, has
since reduced to 78% and seems

set to continue to fall.
The new players in town,
relatively speaking are the
discounters – dominated by Aldi
and Lidl - who are outperforming
the big four with a collective
market share rising from 2% in
the late 1990s to over 8% today.
Aldi currently has a £600m
expansion plan, looking to open
65 new stores this year, and Lidl
are looking to open a further 20.
We have witnessed first-hand
their appetite for expansion with
client sites in two different parts
of the country going under offer
to Aldi for their new store formats
of 17,000 sq ft on 2 acres.
Against the backdrop of this
structural change, there have
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also been the well-publicised
problems at the Co-op which,

though largely arising from its
banking division, have caused a
brighter light to be shone over
its overall business strategy.
The consequence for its food
retail division appears to be an
intention to re-focus on the
convenience sector, shedding its
larger stores.

Residential
From a boom to recession to
boom within six years, the
residential development sector is
one which mirrors, probably more
than any other, the economic
fortunes of the country and, in
particular, that of the general
public.
A great example of the roller
coaster nature of this sector is
where a longstanding client sold

a site at the top of the market in
2007/8 to one of the big national
house builders. 12 months
later our client was asked if he
would buy it back at 1/3rd of
the price paid. Five years on and
we are in the midst of another
house building boom with the
associated issues that follow –
rising land prices (again) and
shortage of construction materials
and labour.
The relaxation of planning laws
has helped drive this boom and,
familiar. Simply put, this policy
means that if the Local Planning
Authority cannot demonstrate
six years supply of housing land
(based on central government
figures) then it will find it very
hard to turn down planning
applications for new housing

Edward Preece

development, wherever it is
proposed.
Whilst this policy is bringing
the increase in the rate of new
build the government is seeking,
it is questionable whether it is
delivering the houses where they
are most needed and at a price
level which is affordable to those
most needing them.
Although constant change
means forever facing new
challenges, it’s something
we embrace and enjoy. The
experience gained with each
project in the ever evolving
property environment brings a
broader & deeper perspective to
the next.

Hawke Ridge Business Park
ready to invest in Wiltshire

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