The city’s annual in-depth commercial property review published by Innes England has revealed that the industrial market dominated with prime rents in that sector growing by 26% in five years.
The 11th Market Insite report – which monitors trends in the regional property market focussing on Derby, Leicester and Nottingham – also identified that office take-up fell below the long-term trend as supply remains low.
In Derby, the 2017 report highlights:
- Industrial market remains strong with Goodman securing the year’s largest pre-let at Derby Commercial Park to CH Robinson
- Prime industrial rents rose to a record high – a 26.3% growth over the last five years
- Transactions on second-hand office space made up 96% of activity
- Office supply dropped to its lowest level in five years
- Pride Park benefited from DHU’s 30,000 sq ft acquisition within the Johnson Building
- £153m worth of investment transactions were completed in 2017 – notably the sale of Common Road, South Normanton for £23.7 million
Nick Hosking, director at Innes England, said: “The industrial sector performed well in 2017 with take-up echoing the previous year. Prime rents in the sector rose to a record high of up to £6.00 per sq ft which is a growth of 26.3% in five years.
“The sector was supported by Derby Commercial Park where Goodman struck a ten-year deal on 70,000 sq ft with CH Robinson – the biggest pre-let of 2017. Take-up of second hand industrial stock remains healthy with the former Key Joinery site on Alfreton Road being the largest second-hand unit sold last year to composites manufacturer Pentaxia Ltd.”
Office supply dropped to its lowest level in five years. Deals signed on second-hand office space made up 96% of transactions and a lack of speculative development and loss of stock are the key contributors to this.
“Although supply is low, prime rent rates have remained stable at £16.50 per sq ft. There’s still a market for better quality standing stock and DHU’s acquisition of 30,000 sq ft within Pride Park’s Johnson Building is evidence of this,” explained Nick.
Derby’s retail market remained relatively unchanged. In the city centre intu continues to dominate with the shopping centre performing well, while newcomers joined the High Street including Jack Wills, Bodega and Bunk. Outside of the centre, a 22,000 sq ft deal struck with TK Maxx demonstrated that there continues to be demand for out-of-town retail.
Nick added: “The city benefited from £153 million of property investments and although that figure is slightly down on 2016, multi-million-pound deals are still taking place including the high-profile disposal of last year’s most notable deal, Common Road, South Normanton, which was sold for £23.7 million.
“Given the strength of Derby’s manufacturing base we expect to see the industrial sector perform well again this year. Second-hand office space is likely to make up the majority of office transactions once again with grade A space continuing to be in very short supply.”
