Market snapshot

Office Market Pulse East Midlands Q2 2014

The East Midlands office market has gone from strength to strength during Q2 with a record number of transactions in Leicester, and a 60% increase on Q1 take-up for Nottingham.

With increasing occupier demand putting mounting pressure on stock levels, design and build enquiries are on the increase across the region.

You can download a PDF version of this East Midlands Office Market Pulse, or to read and sign-up to receive Office Market Pulses from other UK centres, click here.

In this issue:

Office take-up on the increase across the East Midlands

Following a strong start to the year, the Leicester office market has gone from strength to strength with a record number of 32 transactions, totalling 286,000 sq ft take-up for Q2. This figure is, however, skewed by the sale of St George’s Central (170,000 sq ft), but this aside, take-up still reaches 116,000 sq ft. This is by far the highest single quarterly total since the start of the economic downturn.

Leicester saw a fairly even spread of transactions in Q2 with 44% in the city centre and 56% out of town. Larger transactions have also emerged with 12 between 5,000 and 10,000 sq ft. For a breakdown of Leicester take-up, click here.

Nottingham recorded 132,000 sq ft of office take-up during Q2, representing a 60% increase from Q1 and bringing take-up for the year-to-date back in line with the year-on-year average. Take-up was split 60/40 in favour of out of town in terms of total floor area; the largest transaction being Babcock’s relocation on Sherwood Park (18,000 sq ft). For a breakdown of Nottingham take-up, click here.

Q2 take-up for Derby was 68,600 sq ft; another marked increase on Q1 and well above the quarterly average of 37,500 sq ft, despite the absence of available quality stock. With deals at Pride Park accounting for the vast majority of take-up, availability is now below 4%; its lowest level since development started on the park over 15 years ago. For a breakdown of Derby take-up, click here.

Significant occupational transactions Q2 2014


Size (sq ft)

Landlord/ Vendor Tenant/ Purchaser Lease information
St Georges Central
St Georges Way, Leicester



Infrastructure Investments Ltd

Lugano, Lake View
Sherwood Park, Nottingham


Highbridge Properties Babcock Plc 10 year lease
£12.00 per sq ft
City Gate


F&C REIT Baker Tilley 10 year lease at stepped rent, averaging £10.95 per sq ft
Equinox, Burleys Way


Delph Pearson Anderson Ltd 3 year 3 months lease. On confidential terms.
Orchard Place, Nottingham Business Park


Wilson Bowden Developments  Yu Energy  Sold for £1,125,000

Design & build enquiries rising in response to low supply

Increased occupier demand has put mounting pressure on stock levels in both city centre and out of town markets in Leicester. Design and build enquiries are increasing due to the lack of suitable existing buildings. Developers are responding with some speculative planning consent to speed up delivery and in the case of Watermead Business Park, plans are on course for the construction of two prime buildings on site late August. For a breakdown of Leicester supply by grade, click here.

Total availability in Nottingham is currently 1.8m sq ft; 57% out of town and 43% city centre. Significantly, 57% of the total comprises grade B accommodation and only 8% grade A. The remaining 35% is grade C, much of which is obsolete. For a breakdown of Nottingham supply by grade, click here.

At the recent British Council for Offices (BCO) Annual Conference, senior figures warned that the shortage of office space could throttle the UK’s growth potential and of the need to keep occupiers at the heart of the sector’s work to sustain economic recovery.

Delegates were united in the need to look beyond London to grow the mid-tier of UK cities and attract inward investment in order to remedy regional imbalance.

For a breakdown of Derby supply by grade, click here.

Commercial property builds momentum

Investment in the UK commercial property sector totalled £11.9bn during the second quarter of 2014 - a 10% increase on the first quarter of the year and 45% higher than in the corresponding period last year.

Investment in the regions has mirrored this trend, with a 39% increase in regional UK offices investment in Q2 compared with Q1. This increase in spending has been predominately led by UK institutional investors as the lack of prime office stock and increasing occupier confidence is continuing to put downward pressure on prime office yields.

Notable transactions include:

  • New Castle House, Nottingham  to a London fund for £8.0m
  • Lakeside House, Northampton to Valad for £20.68m

Read our latest UK Investment Transactions (UKIT) report here.


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Jane Taylor
Director - Office Agency

0116 255 2694

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