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Secondary market set to boost regional businesses

Early signs of a resurgence in the secondary retail and commercial property markets look set to boost workloads for medium-sized regional contractors.

Large developers such as Land Securities and British Land are on the hunt for deals in the sectors outside London, while others look to maximise the value of existing stock as the prime market looks ready to overheat.

Speaking to H&V News, Local Shopping Reit joint chief executive Nick Gregory said developers operating outside the prime market are looking to put capital into existing assets.

“Before the downturn the market was all about collecting assets,” he said. “Now, more landlords and developers are looking to funnel capital into existing assets to create additional value.

“The only caveat is when the property is owned by the banks, as they don’t have the capital to invest right now.”

His comments follow on from those made by British Land chief executive Chris Grigg, who last week confirmed a £30 million deal to buy Green Lanes Shopping Centre in Barnstaple, Devon.

“There are a greater number of attractive opportunities coming to market, particularly good secondary property assets that require combinations of development, refinancing and restructuring,” he said.

“We expect prime to outperform secondary but what is starting to emerge is this realism about price from potential vendors, so you start to see value emerging and opportunities to buy.”

Contractors with strong regional links such as Kier and Willmott Dixon are likely to benefit from an increase in mid-sized commercial schemes, but other contractors are now manoeuvring themselves in a bid to capitalise on any resurgence.