Market snapshot

Office Market Pulse East Midlands Q1 2015

The East Midlands office market saw a steady start to the year and despite the continued shortage of grade A supply across the region, with significant investment planned for schemes such as Welford Place, Leicester, and Phase 2 at Watermead, Syston nearing completion, the outlook is promising as we head further into 2015.

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:

A steady start to the year for the East Midlands office market

Leicester saw a steady start to the year with 15 transactions recorded; seven in the city centre and eight out of town. Total take-up for Q1 reached 129,526 sq ft, including a significant city centre transaction with the sale of the Royal Mail Campbell St site (80,012 sq ft). Just three transactions were above 5,000 sq ft; 80% of transacted space fell below 5,000 sq ft. For a breakdown of Leicester take-up, click here.

Nottingham office take-up totalled 123,922 sq ft in Q1, with five transactions between 10,000 and 20,000 sq ft. 20 transactions were recorded overall, equally split between city and out of town. Three of these transactions relate to the current permitted development ruling, with these properties now destined for residential conversion. For a breakdown of Nottingham take-up, click here.

Q1 office take-up in Derby was 32,312 sq ft with the largest letting comprising 5,795 sq ft between Trent Psychological Services and Victoria Properties (Derby) Limited. This represents a below par quarter with just 14 transactions recorded. Only two transactions were above 5,000 sq ft, seven transactions were over 2,000 sq ft, and the remainder were in much smaller premises. Interestingly, all 14 transactions were lettings, with no freehold deals taking place. For a breakdown of Derby take-up, click here.

Significant occupational transactions Q1 2015


Size (sq ft)

Landlord/ Vendor Tenant/ Purchaser Lease information
21 Campbell St


Royal Mail

Hind Properties

Sold for £2.275m

Oak House


Cheeky Monkeys (Cambridge) Limited Impero Solutions Limited 10 year lease
Confidential terms
Equinox, Burleys Way


Delph Group Portal Ltd Confidential terms
41-43 Hounds Gate


Custodian Capital MW Properties Ltd Sold for £745,000
Exploration Drive
Pioneer Park


SDC Securities Leicester Ltd Measom Freer  Sold for £1.6m 
37 Stoney Street


G W Price Ltd  Little Fish (UK) Ltd  10 year lease
Confidential terms 
107-111 Uttoxeter New Road


Victoria Properties (Derby) Ltd  Trent Psychological Therapy Services 12 year lease
Confidential terms 

Grade A office space on the horizon for Leicester

Supply of grade A office space remains tight in Leicester city centre and with further take-up expected in Q2 at Colton Square, stock will deplete further. However, the recent announcement from Leicester City Council of an agreement for taking the Welford Place site forward with a new mixed use development is good news for the city. The scheme will include a significant amount of grade A office space and will reinforce the New Walk area as a central focus for the professional office district. Development is likely to start towards the end of the year with completion set for early 2017.

Out of town, the Marlborough speculative office scheme of 33,000 sq ft is nearing completion at Watermead Syston, and will boost supply on the A46. In addition, Phase 2 of the main Watermead Business Park will shortly be launched for new design and build opportunities. However, availability at J21 with Grove Park and Meridian Business Park remains limited, with no large existing space available and limited design and build opportunities at Grove Park. For a breakdown of Leicester supply by grade, click here.

Supply of grade A office space remains low in Nottingham with no new developments and only one significant refurbishment opportunity being brought forward in Q1; F&C REIT’s 37 Park Row in Nottingham city centre. Grade B space still dominates, with a number of offices expected to leave the market within the year for residential conversion under Permitted Development ruling. Availability in the centre and out of town markets currently stands at approximately 1.87m sq ft, with the overall majority located out of the city centre within the grade B band. For a breakdown of Nottingham supply by grade, click here.

Office supply in Derby (both in and out of town) currently totals approximately 495,000 sq ft. Although this seems significant and suggests the city’s current stock amounts to over three years supply, much of the available space does not meet modern occupier requirements. More notable is the current lack of supply on Pride Park where the vacancy rate remains less than 3% and the largest space currently available is only 6,500 sq ft. For a breakdown of Derby supply by grade, click here.

Record quarter for UK property investment

The latest edition of our UK Investment Transactions report reveals that investor appetite has been undeterred by the upcoming General Election. On the heels of a record year in 2014, Q1 volume reached £19.1bn, the second highest quarterly total on record after Q4 2014.

A surge of overseas investment was a major driver of this strong performance, with inflows from international investors increasing by 57% year-on-year to reach £9.6bn – half of the quarter’s total volume.

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

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