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SME business property boom is on the way

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Small and medium sized businesses are set to drive a commercial property boom in the next two years, according to a new study.

Research from by finance specialist Together shows nearly six out of ten SMEs (58%) nearly 3.4m across the UK – say a boost in business is driving a need to move or extend their existing site for additional staff and equipment as well as space for storage.

Among firms with property plans 30% are looking to move to bigger premises while one in six (16%) aim to extend their existing facilities. Another one in eight (12%) will buy additional buildings or construct them from scratch.

However, some businesses fear their ambitions to expand could be hampered by a shortage of suitable property.

Andrew Charnley, head of corporate relationships at Together said, “There is real evidence of a property boom getting underway as business owners finally feel assured enough to commit investment into a move or to extend where they are. It is great to see that SMEs are genuinely on the move now that business confidence is returning.

“However, finding the right property may be tough for some. Firms will need to make sure they can move quickly once they spot an opportunity, so it’s advisable to have clear plans in place first – including finances, lenders and lawyers – to enable them to push ahead with their growth ambitions.”

Nearly three out of four SMEs in London (73%) and 71% in the North East (71%) are planning to grow their premises over the next two years. Wales (64%) and the North West (63%) are also focused on growth.

However, the survey revealed that about 29% of SME bosses say there is a real estate stock shortage in their area with the South West facing the biggest shortfall.

Around a third (35%) of companies are worried about the costs of moving while 27% are concerned about the potential disruption. Around a fifth (19%) say they are nervous about the process of moving.

Finance is also a concern for business owners with around 200,000 SMEs saying they are worried about lenders not understanding their business while nearly 300,000 are concerned about the speed of decision-making by banks.

Charnley added, “There is a real opportunity for lenders and other advisers to provide support for SMEs to help them achieve their ambitions. The worry is that some lenders tend to ignore business track records when making decisions and adopt a ‘one size fits all’ approach.

“There are differences throughout the country and lenders should be adapting to local conditions. Yet the big banks seem to be concentrating on personal customers and that is creating opportunities for challenger banks and established finance specialists such as Together.”

The table shows the picture across the country with SMEs in London and the North East the most likely to invest in property. Businesses in the South West and East Midlands are most likely to face issues with property availability.




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