Gloucester's commercial property market proved extremely resilient in 2017, according to the latest figures.

The findings in Alder King's Market Monitor report show that take-up of office and industrial space, although down on the record figures of 2016, was in line with the five year average. But it was constrained by the lack of good quality immediately available stock, limited large scale speculative development and the loss of consented sites to alternative uses.

Adrian Rowley (pictured), Alder King partner, said the ongoing shortage of quality office and industrial space is a concern.

"Supply levels have been falling for several years now and are becoming increasingly acute across the South West. However Gloucester is in the fortunate position of having more speculative industrial development than other locations.

"Schemes now under construction include St Modwen's Gateway 12 which will provide 115,000 sq ft in three buildings, Prospect Land which is developing 34,000 sq ft at Triangle Park and Gabwell, which is building 40,000 sq ft at the Quadrant Centre. This is of course encouraging news for local industrial occupiers but further speculative development is needed to ensure the county maintains its competitiveness."

The strength of the region's occupational market resulted in a change in rental levels in many centres. In Gloucester, a new rental high of £20 per sq ft was set for the out-of-town office market, while rents for Grade A industrial space rose from £6.50 to £6.75 per sq ft. Further upward pressure on rents is expected in 2018, fuelled by a continued shortage of stock and an increase in new build construction costs.

2017 also saw a record number of investment transactions, mirroring trends nationally. Around £62.7 million of transactions took place in Gloucester, up 68 per cent on 2016. The largest was Reef Estates' purchase of Kings Walk Shopping Centre from Aviva for £20.5 million. This and the much-anticipated mixed use redevelopment of the Kings Square development will have a significant impact on rejuvenating the city centre. Demand for out-of-town units also remains strong, led by coffee drive-thrus and the discount food retailers.

Looking to the year ahead, Adrian Rowley said: "We anticipate another strong performance from the region's property market this year. The occupational market remains buoyant, with strong demand across many sectors but particularly from the logistics, engineering, serviced office and public sectors.

"The major challenge of meeting housing demand will remain a key theme with strong demand for short term and strategic residential land. The green belt strategy will this year be tested at policy level but we expect the themes of higher density and more intense use of existing brownfield land to remain the primary response."

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For more information about Alder King visit www.alderking.com  or call Adrian Rowley at the Gloucester office on 01452 623290. The full report is available here.