commercial property lambert smith hampton

News - 24/07/2018

Tale of two cities sucess as office demand rises

Leicester and Derby have seen demand for office space rise significantly during the last three months, which has seen more than 30 deals completed across the East Midlands, according to national commercial property consultancy Lambert Smith Hampton.

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In Derby, at 44,147 sq ft, Q2 take up had increased by 223% on the previous quarter and 430% higher than the same quarter in 2017.

Leicester saw an increase of 90% on Q1 2018, with 80,263 sq ft of take up – more than twice the level recorded in the same quarter last year. Meanwhile, in Nottingham, Q2 take up was down 20% on the previous quarter at 62,525 sq ft. That was 38% lower than Q2 2017

Phil Quiggin, head of office at LSH in Nottingham, said: “It’s a mixed picture across the East Midlands, with some areas performing much better than others. For example, in Leicester we saw 16 deals of significance including seven over 5,000 sq ft. The largest deals being 15,000 sq ft to an unnamed occupier at Leicester Waterside and 12,431 sq ft letting to Leicester Mercury at 16 New Walk in the city centre.

“Availability continues to fall, now just under 382,000 sq ft across the wider market, and over 80% of which is in the city centre. The only building providing Grade A space in Leicester is the remaining space in Colton Square now accounting for 2% of supply.”

In Derby, 10 deals were recorded with two over 5,000 sq ft – the largest being the letting of 13,269 sq ft to Pattonair at Brunel Parkway, Pride Park. Availability stands at 430,000 sq ft, but there is zero Grade A space available following recent lettings, said Phil.

There were only 12 deals of significance in Nottingham in Q2, three of which were greater than 5,000 sq ft – the largest being 15,138 sq ft at Equinox in the city centre. Availability continues to fall, now standing at 813,000 sq ft across the wider market, split 60/40 in favour of the out of town market.

Some 36% of stock is Grade C and in need of refurbishment, while only 12% is Grade A

Phil added: “In all three cities enquiries remain good but Q3 will be a challenging quarter with take up likely to be held back by limited availability.”