Market snapshot

Office Market Pulse East Midlands Q1 2014

Despite the continued lack of grade A supply, the East Midlands office market saw a strong start to 2014 with Leicester's Q1 take-up figure outperforming each quarterly total recorded last year. With significant investment planned for schemes across the region, 2014 promises to be an interesting year for development pipeline.

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:

Transaction levels on the rise

Leicester has seen an increase in office market activity with the number of transactions in Q1 surpassing every quarterly total seen in 2013. Although Q1 take-up (73,000 sq ft) was actually lower than Q4 2013 (103,000 sq ft), the increase in activity (27 transactions) is significant. 85% of these transactions were below 5,000 sq ft, with the remaining over 5,000 sq ft largely in the out of town market. For a breakdown of Leicester take-up, click here.

Nottingham recorded 82,681 sq ft of take-up during Q1, representing a dip on the quarterly average (115,000 sq ft) and reflecting the limited amount of quality office stock available. Take-up was split evenly between the city centre and out of town markets both in terms of the number of deals and total floor area. Based on deals now in solicitor’s hands, Q2 should see Nottingham take-up back on track and in-line with average half-year figures (230,000 sq ft). For a breakdown of Nottingham take-up, click here.

Q1 take-up for Derby (25,819 sq ft) also fell below the quarterly average of 37,500 sq ft which, again, reflects the absence of quality stock available - particularly in the Pride Park area of the city where many occupier requirements are typically focused. For a breakdown of Derby take-up, click here.

Significant occupational transactions Q1 2014


Size (sq ft)

Landlord/ Vendor Tenant/ Purchaser Lease information
Park House, Meridian East Meridian Business Park




Sold for £1,050,000
1 Oak Spinney Park, Ratby Lane Leicester


Sector 2 My Home Move 2 year lease
£14.50 per sq ft
Edgeley House
Riverside Office Park


Undisclosed Mental Health Concern 5 year lease at headline rent of £10.00 per sq ft
Lock House, Wilford Street


Undisclosed Oakbrook Finance 5 year lease at headline rent of £14.50 per sq ft

East Midlands development pipeline highlighted at MIPIM

Public sector development opportunities in the East Midlands received much promotion at this year’s MIPIM. Leicester City Council showcased visions of the city with both the Welford Place city centre scheme and Waterside featuring as key projects for the coming year. Both of these schemes are expected to include new build offices within mixed use settings. Welford Place has now reached the developer selection process and it is anticipated a developer should be in place by the year end. For a breakdown of Leicester supply by grade, click here.

Nottingham City Council also announced intentions for city centre regeneration and office development by agreeing to back two schemes; the proposed purchase of the Central Nottingham Police & Fire site, and secondly, a commitment to take a 25,000 sq ft pre-let from Peel Developments as part of a 50,000 sq ft phase 1 development within the Unity Square scheme. For a breakdown of Nottingham supply by grade, click here.

Derby City Council chose to focus on the city’s ‘Capital of Innovation’ tag, centred around Infinity Park, the 250 acre site being brought forward by the City in conjunction with Rolls Royce, the Harper-Crewe Estate and developers Miller Birch and Wilson Bowden. For a breakdown of Derby supply by grade, click here.

Read our Office Market Review 2014: What Occupiers Want.

Property investors turn to the regions

Investment in the UK commercial property sector during the first quarter of 2014 totalled £10.9bn - a 35% increase on the corresponding period last year and the third highest quarterly level since the start of 2007.

The regional markets are receiving more attention from investors, as prime central London prices continue to rise.

Investment in the regions more than doubled to £4.2bn, compared to £2.0bn during the first quarter of 2013, and now accounts for 39% of the total - against 25% in the corresponding period last year and 33% during the final quarter of 2013 – as recently evidenced by our acquisition of Morgan Sindall House in Rugby on behalf of Schroders.

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

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