In another new addition to our features suite, Five Minutes With, we chat to business figures for a quick fire Q&A to learn more about their areas of business.
First up is commercial and residential property expert Gursh Kahlon, co-director of Clearwater Developments and co-chairman of East Durham Business Network.
“We have purchased a former Grade II listed building, which we plan to convert to 34 luxury apartments.”
EDB: Commercial property – what’s hot and what’s not? GK: The commercial property landscape has evolved in recent times, particularly since Covid, and now I think there’s a greater expectation of what people want from their workspaces.
They expect that home-from-home feel, with access to added extras like an on-site café and gym, communal facilities and secure car parking.
But they also don’t want to pay the rates that commercial floor space could command pre-Covid.
So in that sense, it’s a tenant’s market, because the management costs of large developments like Spectrum 5 or Lighthouse View Workspaces have gone up.
However, leasing office space is still a better option than having empty suites that you’re paying business rates on, even if it means having to lower rental amounts per square foot.
EDB: What about the picture in terms of acquisitions? GK: Significantly cheaper. Because of the running costs of multi-occupancy business centres, and the fact leasing is a tougher proposition, you can pick up buildings at reduced cost. In that sense, there can be good deals to be had.
EDB: You mentioned business rates. How are they hampering the property market? GK: The high levels of business rates are causing problems for commercial property companies, so much so that we have lost tenants because of it.
It means we have to look at ways to mitigate costs where we can, to try and make the move into office space as financially viable as possible, whilst helping us get a deal over the line.
EDB: What about the residential property market? GK: It’s definitely buoyant at the moment. But the picture is very different to commercial property.
With the residential market, there is a lot of investment up front, while the returns could take a few years to materialise. So as the developer you have to be patient, but you know that you’ve potentially got an excellent return at the end of the project.
Commercial property, on the other hand, presents a quicker but smaller return.
EDB: You have recently taken on a new high-end apartment development in North Shields haven’t you? GK: Yes, with my residential property company we have purchased a former Grade II listed building which we plan to convert to 34 luxury apartments.
We’re going for a high-end finish and expect strong demand, particularly as parts of North Shields have seen a 23 per cent increase in average property prices since 2022.
It’s an exciting project for us and we can’t wait for the scheme to complete with the plans we have in place.