The East Midlands office market has started 2013 strongly with Q1 take-up totalling almost 120,000 sq ft.
Leicester saw higher take-up than Nottingham with 19 transactions totaling over 50,000 sq ft. Derby’s take-up remained steady with a total of just over 25,000 sq ft transacted, but Nottingham saw a 47% decrease in comparison to Q1 2012 with a total of just over 40,000 sq ft.
Market confidence shows signs of improvement
Derby saw an impressive first quarter with the completion of a freehold sale to Severn Trent Water; approximately 46,000 sq ft of offices with additional warehouse space.
Leicester saw a significant number of transactions commence legals in Q1 with 50,000 sq ft completing. With more due to complete in Q2, market confidence is certainly showing signs of improvement.
Nottingham continues to suffer from a shortage of grade A office supply with take-up levels falling below the year-on-year Q1 average.
First speculative office development in 10 years
Jane Taylor, Director in our Office Agency team, based in Leicester, said the East Midlands market had been boosted by the first speculative office developments for many years.
Friar Gate Square in Derby comprises just over 32,000 sq ft of office space constructed to an occupational density of 1:8.5 sq m and finished to a BREEAM rating of 'excellent'. Completed to grade A specification, the building provides floor plates of 3,500 to 7,000 sq ft.
The development, which can accommodate a further 43,000 sq ft in new buildings, has been undertaken by Lowbridge Developments with financial support from Derby City Council.
Phil Quiggin, Director in our Office Agency team in Nottingham, said: “The council's input was integral to the scheme and it is hoped local authorities elsewhere in the East Midlands will follow Derby's lead to encourage speculative office development across the region.”
More speculative development on the horizon
In Leicester, Marlborough Property Co Ltd is launching a speculative phase of out of town office development in response to the lack of grade A supply. They will construct circa 30,000 sq ft of grade A offices over three buildings at Watermead Business Park in Syston. The site is well located with some high calibre occupiers such as Bentley, Flo Gas and Dunelm Mills.