Face the Strange

2019: What a strange year that was. Against a background of virtual civil war if you believe your social media, the country stumbled through a 12 month long delayed Brexit referendum hangover before the paracetamol eventually kicked in during December and we woke up with that horrible sensation of not knowing quite where we are.

On the plus side the political paralysis didn’t seem to dampen enthusiasm for business too heavily.  I’m pleased to say we have been growing our business year on year and 2019 was no exception.

We had a very good year for commercial agency across all sectors.  Derby still proved attractive to a number of new national occupiers, and we were pleased to conclude sales and lettings to Trucktyre ATS; James Hargreaves plumbing; IRISNDT and Plinths of London to name a few.  We also had some very good sales including the premises occupied by Pattonair on Pride Park, 3.5 acres of land with planning for residential development at Littleover to William Davies Homes and towards the end of the year served up the old RBS unit at Park Farm Allestree to Costa Coffee.

All of this activity produced a great result in BB&J Commercial being awarded Derbyshire’s Dealmaker of the Year for the second year running by Estate’s Gazette, which we are all delighted with as it is no small achievement.

Looking forward, after a landslide result for the recently elected Conservative government I think 2020 is going to be yet another strange and interesting one on a business front for many different reasons.  The overall result of a Conservative government in power may not have been a total surprise, but the scale of it surely was.  Putting aside any personal political allegiances the one big plus is that after three years of increasingly acrimonious wrangling we at last have some political clarity and clear sense of direction.  Whether that is a direction we want or ought to be travelling in is another matter entirely, and the proof in that pudding may well take some considerable time to finish baking.  However, it seems that for now the time is over for singing along with Joe Strummer on ‘Should I Stay or Should I Go’, as Brexit is surely a certainty.

In the short term we will I think see a ‘Boris bounce’, inasmuch as businesses benefit from having certainty, and this has already been reflected in the strong rise of sterling against both the euro and dollar in the immediate aftermath of the election.  Whether positive business sentiment can last the whole year may however be dependent upon a number of factors.  I suspect the most important, both in terms of practicality and impact on public sentiment, will be quite how well negotiations over a new trade deal with the EU progress.

The governments objective of getting this achieved by the end of 2020 is by most accounts a bit of a tall order unless a compromise so called ’dirty-deal’ is done which may leave a lot of details still to fill in.  Of course, the closer any proposed deal is to the current trade agreement we have with the EU the easier it should be.  We will see, but as with any deal the devil is in the detail.  However, given that any details whatsoever on the Brexit offering have been in very short supply, I think as they emerge or are negotiated we could see a significant move in sentiment either behind or against the government, bearing in mind their manifesto basically comprised the slogan ‘Let’s get Brexit Done’.  Their risk is that if they don’t get it done, and done to the public’s liking, Boris’s bounce could quickly fall a bit flat.

Interestingly, our own experience throughout the entire Brexit saga (so far) has been that we have seen no discernable drop off in terms of commercial property activity, be it sales, lettings acquisitions or valuations.

I would even go as far as to say that we have never been so busy in terms of carrying out professional valuations, whether that be on existing bricks and mortar or new developments and for transactions or re-financing.  Neither is there an apparent shortage of lenders willing to offer finance, with there being more lenders in the market place than for quite some time.  In addition, the demand for good quality freehold commercial property continues unabated.

Interestingly, it is beyond doubt that over the last three years of political disagreement and crisis there have been plenty of opportunities for businesses and borrowers alike to ‘pull back’ in fear of Brexit.  The fact that they have not done so hopefully indicates an underlying confidence which will remain over the longer term, but that will be something that will certainly be challenged over the next several months and will be well worth reassessing in a year’s time.