Developers and landlords are investing millions refurbishing their city centre properties, because there’s not enough high quality office space to satisfy demand, according to commercial agent, James Keeton from JLL.
There’s been concern for several years that not enough new offices are being brought forward to meet predicted demand, and the issue was highlighted when 2013’s city centre office take-up tumbled by a massive 44% on the previous year.
Now James Keeton, associate director at the Nottingham office of JLL reports that almost 130,000 sq ft of existing space is being refurbished to meet the latest standards, across four locations.
He says once the refurbished offices are ready for occupation, they will more than double the amount of prime office space available in the city centre.
“There’s less than 100,000 sq ft of Grade A at the moment, so it’s easy to see what the impact of these four refurbs will have in terms of satisfying pent-up city centre demand,” said James.
“During 2013, we saw a dramatic collapse in the amount of space taken up in the centre of Nottingham, and a sharp rise in the number and size of lettings in the out-of-town market. We feel this was due at the time to better supply out of town, while in the majority of UK office markets there is increased demand for city centre stock. Occupiers were having to take what was available at that time whilst others didn’t move.”
“One of these refurbs is completed, Park View House, on the Ropewalk, and work is just about to start on 37 Park Row, so there’ll be around 42,000 sq ft of space in those two schemes. New Castle House, Castle Boulevard and City Gate West will be next, and they’ll bring forward another 86,000 sq ft.
“All those refurbs will be completed by the end of 2014, and although they obviously won’t fully impact the take-up figures this year, they certainly will during 2015. As city centre availability increases, I’d also expect the out-of-town market to fall back from the high we saw last year.”
JLL is based itself in refurbished space at City Gate East and whilst James believes the four refurbs will help the Nottingham market, increasing city centre office occupation has wider and much needed benefits to our retail and leisure economies too.
“As good as refurbs can be, there will always be some companies and organisations who want brand-new space, many are looking across different cities and at the moment, they aren’t likely to choose Nottingham because there are so few options available, and it’s becoming a major strategic challenge for the city, as we need to facitliate our forecast economic growth within new high quality office stock,” he said.
