Rental demand is through the roof. “I’ve worked in Portsmouth for 10 years and I’ve never seen anything like it. Properties can be gone in an hour or two,” said Mr Loudon. Supply is low: Morris Dibben’s office has 24 available properties, normally they would have 40. Some rents on some homes have jumped more than a quarter since 2019, he added.
Portsmouth also offers big opportunities for investors to convert commercial property into homes, which has become easier with new permitted development rights. Emma Davis* runs the British property arm of a family office based in Singapore, which is investing in Portsmouth as a result of the pandemic.
“What we look for in the UK is areas with lots of high street vacancies, and a pro-active local council. That is what has drawn us to Portsmouth,” said Ms Davis. The family office is about to complete on two units of shops and offices to turn into homes. “The first one was bought in 2010 for £10m; we’re buying it for £2m. The second was bought in around 2011 for £15m, and we got it for £4.1m.”
The pandemic has completely overhauled the development market. “Covid decimated high streets, and a lot more shops became vacant,” said Ms Davis. In turn, rents on retail units plunged. Over the course of the pandemic, commercial landlords across the country have shouldered a rent shortfall of £6.4bn, according to Remit Consulting, a consultancy.
“Before, almost all commercial space was held tightly in pension funds. It was always a closed network that mostly transacted off market,” said Ms Davis. “But they have become forced sellers this year, and there are now these huge bargains.”
*This person’s name has been changed
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