Just 45 minutes from London by train, Peterborough remains a surprisingly affordable place to both live and work. Yet, with vast swathes of commercial property being converted into residential through Permitted Development Rights (PDR) and very little industrial development, the city has struggled to capitalise on its close proximity to the capital in recent years. However, with a surge in demand and plenty of room for further growth, is it now Peterborough’s time to shine?

Of late the local industrial market has been given a new lease of life. Moving away from the declining manufacturing and engineering sectors, the shift towards online retail has instead seen the likes of Amazon, Debenhams and Ikea set up major distribution hubs in the city. But with vacancy rates now at historic lows of 2.2 per cent, there remains little choice for both existing occupiers and new entrants looking for warehouse space.

Peterborough’s office market is facing similar challenges. To date, 600,000 sq ft of office stock has been converted through PDR to residential, which has resulted in comparatively low vacancy rates when compared with other UK cities. Currently at 4.4 per cent, this can also be attributed to a lack of development, but with current rents at £13 per sq ft the figures just don’t stack up.

While this may appear negative at a glance, Peterborough’s commercial property market actually offers significant opportunity across both sectors.

From an industrial perspective, schemes that have come out of the ground recently have been extremely successful. Peterborough Gateway is a case in point, with Roxhill disposing of more than 2.6 million sq ft in just three years. With only a few plots remaining and no other sites actively being marketed, the short-term solution is for landlords of second-hand units to take advantage and undertake refurbishments, especially as the rent spread between grade A and B stock continues to narrow. Looking ahead, however, what’s needed is a new phase of speculative development to ensure future growth.

Similarly, the office market is also faring well. Despite the fact that development is not possible without a pre-let, there is still significant demand for refurbished office space. The loss of stock to PDR has already created upward pressure on rents and this will help continue to drive growth.

Ultimately, without new development on the industrial side and refurbishment within the city’s office sector the recent upward pressure on rents may start to stall. For this reason, now is the time for Peterborough to live up to its potential by attracting inward investment into its commercial property market.

Further information

Read more: Peterborough: A growing city