The East Midlands office sector continues to be a popular destination for would-be occupiers, but Q4 is likely to be challenging because of limited stock, according to analysis by national property consultancy Lambert Smith Hampton (LSH).
Its Q3 Office Market Pulse (OMP) reveals that availability has increased slightly in Nottingham for the first time in three years, with some 893,000 sq ft space ready for occupation, 60% of which is located out of town.
There were 21 significant deals completed in Q3 in the city, but only one over 5,000 sq ft, which was the letting of a 12,053 sq ft office to Trent Education in Haydn Road. Overall, take up in Q3 was 50,561 sq ft – up 20% on the same quarter last year, but a 23% reduction on Q2 2018.
Phil Quiggin, head of office at LSH Nottingham, said: “The picture remains the same for the East Midlands in that there is a great deal of demand for grade A or refurbished office stock in the East Midlands, but there is a lack of availability that must be addressed for the region to thrive. Businesses want to be here.”
In neighbouring Derby, take up in Q3 was 45,571 sq ft – up 3% on Q2 2018 but 20% lower than the same quarter last year. Of the 18 deals recorded in the quarter, one was over 5,000 sq ft, which was a letting of 6,374 sq ft at St Katherine’s House.
While there is availability of 424,000 sq ft across the wider market, just over half of which is in the out of town market, there is no grade A space in the city. Grade C space has also reduced significantly because of change of use plans.
The OMP also reveals that availability is falling in Leicester and now stands at just under 379,000 sq ft, 80% of which is in the city centre.
Q3 take up was down 70% on Q2 2018 at 24,999 sq ft Q3, while there were eight significant deals, the largest of which was Imperial Events taking 8,180 sq ft at Mercury Place in Leicester city centre. The only grade A space that will be available in the city will be at 3 Penman Way, Grove Park, when its refurbishment is complete.
“There’s a lot to be positive about in the East Midlands office market and despite the anticipated challenges of Q4 over availability, we expect the region to continue to attract business from both SMEs and larger companies,” added Phil.
