Just a few days ago, Derbyshire & Nottinghamshire Chamber of Commerce delivered some news which, it’s safe to say, we’ve all been waiting for: the regional economy might just be looking up, writes Laura West of FHP.
We’ve waited a long time for this moment. While George Cowcher, the Chief Executive of the Chamber of Commerce, sensibly added plenty of caveats to his judgements, the evidence was undeniable – Derbyshire businesses are reporting that their turnover has been rising, profits are up, and orders are getting stronger. If the sun keeps on shining there’s every chance some of these businesses will push the button on new investment and new staff.
The implications for the commercial property market in the city and county are obvious: growing businesses could well look for more space. Infact, there is some solid evidence that this is already happening. During the past few months, FHP have secured a series of office and industrial deals at key sites in Derbyshire which tells us that the ‘engine’ of the county’s economy is steadily beginning to motor.
The ‘engine’ in question is the legion of privately-owned small and medium-sized businesses. Some have been around through thick and thin, others were started by people who decided that the downturn was the moment when they would go out on their own. Either way, they are financially conservative and hard-working – just the kind of companies we need more of to sustain recovery.
Over the past few months, these businesses have been busy laying the ground for their future. At The Courtyard, a 10-unit office development at The Village office park at South Normanton, we have gone from a situation where two units were occupied to eight being occupied in the space of 18 months. With other deals in the pipeline, I suspect it will be full before the autumn.
The Courtyard is home to a mix of national and local occupiers attracted by Grade A specification ‘own front door’ offices ranged across two floors which tick three really important boxes. They are well-presented, giving a professional appearance, they are a cost-effective way of getting a freehold property asset, and their location next to Junction 28 of the M1 means enormous regional and national markets are within easy reach.
This is why these occupiers – the likes of Genco Developments, Optima Design, Purpose Media and Coldharbour Marine – have moved to The Courtyard from previous locations within a three to five mile radius.
Buying freeholds at a site like this is an astute move. Transactions have taken place at a time when the price is right, and the arrival nearby of some major developments at Clowes Developments’ Castlewood site means that the area around Junction 28 is really taking off as a commercial location.
Not that it hasn’t been popular before. Nix’s Hill nearby in Alfreton has been a popular commercial site for some time, and it’s here that Clowes developed the seven-unit Key Point office scheme. Like The Courtyard, progress over the past few months has been rapid: it has gone from only two occupiers to being full in the space of a few short months. The deals here are very competitive leases, and occupiers such as Images Publishing, Water Equipment International and Stancliffe Stone have been attracted by flexible terms and units which are well-presented and ready to occupy.
Just to underline the point, we have been seeing similarly positive signs across the border just a few mils away in Mansfield. There, the 43 acre mixed use Sherwood Oaks development, run by Regal Sherwood Oaks, has seen two out of three units in a new development fill rapidly. Why? The same reasons as The Courtyard and Key Point: well-presented buildings in a great location next to roads which put the region on your doorstep.
Three years ago, these three locations were almost empty. Here we are in summer 2013 and they are on the verge of full occupation, with some well-run SME businesses making astute decisions to buy or lease as the market is beginning to pick up.
If Derbyshire & Nottinghamshire Chamber’s of Commerce’s latest Quarterly Economic Survey isn’t just a flash-in-the pan, we are going to see more businesses finally deciding that now is the time to take the plunge and break free from space or layout constraints that have been holding them back and move to something new.
As ever, the problem is going to be that demand could well outstrip supply, a problem that has been exacerbated in recent years because developers were unwilling to risk speculative development in a weak economic climate.
The signs are that it’s not so weak anymore. So will someone take the plunge and put a spade in the ground? If they do, that’s the point when we can safely say economic recovery has finally arrived in Derbyshire.
