Market snapshot

Office Market Pulse East Midlands Q2 2015

Following a steady start to the year, the East Midlands office market saw the largest single inward investment office deal complete in Leicester and a landmark deal for Derby during Q2. The scarcity of prime stock continues across the region, however there is grade A space on the horizon for Leicester with Marlborough Court at Watermead Business Park due for completion in August 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:

Landmark deals boost region’s office market

Leicester saw a total of 127,000 sq ft office take-up in Q2 and the largest single inward investment office deal since our records began, with the 65,000 sq ft letting at St George’s Central to Hastings Direct. 67% of the total space transacted was in the city centre. Out of a total of 24 transactions, 18 were for properties of less than 5,000 sq ft. For a breakdown of Leicester take-up, click here.

Nottingham office take-up totalled 95,873 sq ft in Q2 with just over half of the 26 deals recorded in the out of town market. 85% of transactions were below 5,000 sq ft with the largest deal being the 30,798 sq ft disposal of the New College Nottingham property. Three properties were sold in Q2, and the remainder were lettings. Despite the growing trend in permitted development deals, the sales were owner occupier related. For a breakdown of Nottingham take-up, click here.

Q2 office take-up in Derby totalled 58,716 sq ft. The largest letting – a landmark deal for the city - was 32,309 sq ft at 1 Friar Gate Square to the University of Derby. Even with just 12 transactions recorded this was an 82% increase on Q1 take-up, with the majority of transactions in the city centre. Only one transaction was over 5,000 sq ft, and two over 2,000 sq ft; the remainder were in much smaller premises and just two out of the total 12 were freehold. For a breakdown of Derby take-up, click here.

Significant occupational transactions Q2 2015


Size (sq ft)

Landlord/ Vendor Tenant/ Purchaser Lease information
St George’s Central Leicester


Infrastructure Investments

Hastings Direct

15 year lease with 10 year break option
Confidential terms

Building One
1 Friar Gate Square


Lowbridge (Derby) Ltd University of Derby 30 year lease
Confidential terms
New College 


New College Nottingham Norsaca (Trading) Limited Purchase price £1,235,000
Lock House
Castle Meadow Road, Nottingham


Lafarge UK Pension Trustees Ltd Cartwright King Solicitors 10 year lease
Confidential terms
First floor, City Gate


F&C Reit Asset Management Lambert Smith Hampton  10 year lease 
(part first floor)
5 Merus Court 


Mango One Ltd  East Midlands Business Ltd Purchase price
First floor
Pentagon House


Loxton Developments Citibank International Sub-lease expiring 2017
(sub-let from Balfour Beatty Rail)
£12.50 per sq ft
63 Friar Gate
    4,242 Undisclosed  Confidential  Sold at quoting price of £280,000
5 Merus Court 


Mango One Ltd  East Midlands Business Ltd Purchase price

Secondary stock continues to dominate

Office supply across Leicester stands at approximately 640,000 sq ft. The market is dominated by grade B space and a further 62,000 sq ft (across four buildings) came to market during Q2. However, the new Marlborough Court speculative development at Watermead Business Park, due for completion in August 2015, will provide circa 35,000 sq ft of grade A office space - the only immediately available grade A out of town office space. For a breakdown of Leicester supply by grade, click here.

Supply of grade A office space in Nottingham remains low with no new developments and only one significant refurbishment opportunity; F&C REIT’s 37 Park Row in the 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 Rights. Availability stands at approximately 1.95m sq ft, with the majority located out of the city centre and in the grade B band. For a breakdown of Nottingham supply by grade, click here.

Office supply in Derby currently totals approximately 690,000 sq ft, however the majority does not meet modern occupier requirements and has been vacant for a significant period of time. The current lack of supply at Pride Park has not altered since Q1; the vacancy rate remains less than 3% and the largest available space is 6,500 sq ft. There are no further developments on the horizon to boost supply. For a breakdown of Derby supply by grade, click here.

Investment boom in East Midlands

Investment in commercial property across the East Midlands has jumped by 146% in Q2 compared to the same period last year. 

Our latest UK Investment Transactions report found that the region was the third strongest performing region in the UK behind the South East and West Midlands with total transactions of £507m – 80% above the five-year quarterly average. 

The largest deal in the region was Tritax Big Box REIT plc’s acquisition of the B&Q Core Products Regional Distribution Centre in Worksop for £89.75m.

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

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