Certainty = Confidence + Trust – Latest Omega Blog Below
The Commercial Market is currently extremely competitive at present across most if not all sectors, industries and participants. I’m sure many of you reading this will agree this reflects your own recent experience of these markets, as we see reducing margins from High-street providers and alternative funders alike, with a growing appetite (within certain parameters!) in credit risk, but also at the front end, with greater demand on turnaround times and competition amongst clients to complete on new purchases.
One of the best examples we see has been the trading business owner-occupied market, with particular focus on the South East and London but also evident in some other regions. Recent market commentary confirms opinion that there is a shortfall in supply of office space, not just in the prime areas but also secondary locations. As available space continues to diminish, so competition for businesses to identify new premises or retain premises by buying their existing units continues to grow. Occupier activity up some 10% year on year, employment levels also improving, are both putting greater demand on the ability to source and purchase suitable premises for any business type.
With this in mind, it is imperative that any business working with us to source their required debt, has complete confidence and trust in our ability to not only deliver the terms we tell them we can, but also ensure this is achieved as quickly as possible. With multiple buyers bidding on every property it is often the buyer who can demonstrate their ability to fund the purchase that ultimately succeeds. This is why we never lose sight of the fact that we need to deliver not only the terms we promised at the outset but, combined with appetite for our deals from lenders, the ability to deliver 80% or even more on owner occupied transactions with rates from 2% over Bank base. In many cases we are asked to liaise directly with vendors or agents, as our experience and reputation can give them the reassurance they need that finance will be available for the borrower to be able to complete the transaction.
As a result of this continued demand across the commercial office sector, delivery and development of new office space is very much expected and required, so the questions is whether we will see a softening of lender requirements and appetite for commercial developments as we’ve seen in the residential development market….I guess we’ll see.