Developers are beginning to prepare sites for future commercial schemes as signs of a return of confidence continue to grow.
In our Q3 East Midlands Office Market Pulse, Jane Taylor, Director of Office Agency, said commercial and residential conversion planning applications in Leicester city centre have seen an increase and on-site enabling works have commenced on both city centre and out of town projects.
The report revealed that the region’s office market saw steady take-up during Q3, with the majority of transactions in the sub-5,000 sq ft size bracket.
Jane said: “As more buildings are considered for conversion across the region, we expect the over-supply of secondary stock to significantly reduce in the coming months. After a sluggish start to the year, Nottingham saw an increase in office take-up during Q3, with a total of 72,500 sq ft let or sold. Take-up continues to be comprised of relatively smaller transactions and reflected an even balance between city centre and out of town.
Out of town take-up dominates during Q3
“Leicester saw 41,000 sq ft of office take-up during Q3. Interestingly, following strong city centre take-up in Q2 (70,000 sq ft), 75% of Q3 take-up has been out of town (32,198 sq ft). As with Nottingham, transactions have been predominantly smaller, with all but one under 5,000 sq ft.”
In Derby, 55,000 sq ft of office space was transacted during Q3, albeit a large proportion of this related to the sale of Derbyshire Building Society’s former HQ at Duffield Hall, purchased by Wheeldon Homes for conversion to residential use.
Jane added: “As steady take-up continues there are signs of renewed confidence from developers in preparing sites for future commercial development. Of particular note is the refurbishment works underway at St George’s Way in the city centre, where MRP Developments are progressing with a 22,000 sq ft office scheme.
“Supply of grade A space remains at an all-time low in Nottingham. However, the massive over-supply of grade C space is starting to reduce significantly as more buildings are being considered for residential conversion. In Derby, availability levels have remained fairly static.”