2010 is going to be a better year for the North East economy as a whole and we predict that this will show through in an increased demand for commercial property, driven by a business sector that has regrouped and reorganized over the recession and is now poised after two difficult years to move forward.

There are a number of reasons for this. Next year’s General Election will bring change regardless of who is elected and on the macro – economic  front, both boom times and recessions are but the extreme ends of the pendulum that marks the economic cycle. After 18 months of negative growth, there is a certain inevitability that the momentum of the natural order, driven by public confidence, will move us back towards more happier times. As the worst excesses of the financial crisis have been in the public domain for some time now and are being worked through the system, the time is right for the vast majority of more cautious and better managed businesses to get going again.

I believe that the optimism cited above is supported by our own experiences in the local property market. We monitor enquiry levels closely and there has been a distinct increase, particularly in the office sector which was almost at a standstill a year ago. Our third quarter statistics for 2009 show that the total amount of office space enquired about has tripled over the same period of 2008. Although these enquiries have yet to translate into actual transactions, the circumstantial evidence is pointing toward an improvement. Enquiries in the industrial market over the same period have remained relatively static, although our experience has shown that this sector has proved more resilient than the retail and office sectors throughout the downturn although owners have needed to be both flexible in their attitudes  and realistic in their rental expectations.

But even recessions have their good points. One of these has been the realisation by owner occupiers, landlords and tenants that property needs to be properly managed and cared for if it is going to perform at it’s best and at the minimum cost for the business using it. Our Asset Management and Building Surveying departments have been increasingly busy over the last two years looking at planned maintenance, reviewing service charges and carrying out appropriate risk assessments to minimize the risk of unpleasant shocks. Similarly, mid-term rent review negotiations, whether for Landlord or Tenant have required a careful and sensible approach, backed by experience in the market. Awareness of liabilities and good planning are as essential in an upturn as they are critical in bad times. There remained, at least until recently, an almost feudal attitude with some Landlords to their tenants – our approach has always been that as paying customers, tenants need to be properly looked after, and that ethic, essential in bad times and good, has been shown to be the right one.

So let’s look forward to 2010, and with care and the right attitude, it will be good to all of us.

Bill Naylor FRICS

Managing Director

Naylors Chartered Surveyors