Slowdown 'is healthy'

Tony Howlings, head of asset management at LSH's Sheffield office, says most investors have been aware that the market was slowing down, with yields edging out, particularly for secondary properties.

The information on returns, released by the Investment Property Databank, confirms that trend and shows UK valuers are reflecting it in their monthly valuations.

"This is a good thing because it makes public the fact that the market is re-adjusting, which in the long term could help to cool the market down and encourage rational behaviour," he says.

"The recent inflation numbers, showing inflation at 1.9 per cent, which is below the Government target, should help to calm investors' attitudes as the pressure for further interest rises subsides.

"It will be interesting to watch what happens to people's investment commitment to the sector.

"Should people start to withdraw from the market, we could see pressure for institutions to offload properties to satisfy redemptions from their funds. If this gets overplayed, we could see yields move out significantly and values fall dramatically.

"However, if investors take a more rational approach and hold in for the long term, the commercial property market should remain reasonably robust."

LSH is advising retained clients, who can make counter-cyclical investments, that there could be strong opportunities, if there is a significant correction in the market.

Tinsley has become a hot trade location for local and national businesses, according to LSH's Sheffield office.

Guy Gilfillan, head of business space at LSH Sheffield, says the Tinsley area has already attracted a number of national and local businesses and there is great opportunity for the area to grow.

"With more developments potentially on the horizon, the area is developing a reputation as a strong trade location," says Mr Gilfillan.

LSH says demand may well outstrip supply within the area, and Sheffield's future looks ever brighter as more investors and developers acknowledge what has been achieved and its potential.

Recent deals include the letting of a unit on the Suon-managed Tinsley Park Close to drainage equipment firm S G Plastics.