Regional Insight: Dealing with demand for Nottinghamshire’s shed appeal

If two years of Covid has taught the regional commercial real estate sector anything it is that a county with a central location and strong road connections will have its logistics developments snapped up as fast as planning committees can vote them through.

And Nottinghamshire, which has both the M1 and A1 pass through it, is no exception. It is a major reason FHP Property Consultants racked up more than 1.2m sq ft of transactions there in 2021. But to think this represents the whole picture of the county’s industrial offering is to miss several important tricks, says FHP’s industrial surveyor Anthony Barrowcliffe.

“We don’t just transport goods,” says Barrowcliffe, “we also manufacture. We’ve got some incredible engineering companies, e-commerce and trades and skills throughout the entire East Midlands.”

Barrowcliffe completed more deals across the East Midlands than anyone in 2021, and FHP comfortably outperformed the rest of the Radius community in both Nottinghamshire and Derbyshire. His deals from the last 12 months highlight both the diversity and strength of demand for industrial stock in the area, with occupiers ranging from online trainer retailers to campervan accessory providers as well the charity sector and even a leisure occupier that offers customers the chance to have balls fired at them to practice their batting skills.

He is clear that while geography is a key factor pulling occupiers to Nottinghamshire, there are other elements at play. “Nottinghamshire is almost in the middle of the country and it’s steeped with history and character and our USP in my opinion is two universities, our locality to the rest of the country and, of course, Robin Hood.”

After two years of dramatic growth for the logistics sector, Barrowcliffe says demand remains strong.

“It’s staggering how much space is required, how little is available and how little land we have to provide development,” he says. “There’s still incredible requirements out there, unfulfilled.”

But it is at the opposite end of the market where he would really like to see action. “I do a lot of work in the sub-20,000 sq ft market and what I would like to see is more smaller industrial units being built, alongside promoting smaller incubator starter units with easy-in and easy-out terms. I just think as a city we should be encouraging this sector and I’d like to see us support and encourage entrepreneurialism more.”

Barrowcliffe is cautiously optimistic for the future but says global events and economic pressures are definitely a concern.

“We’ve started very strong in 2022 and we’re seeing no signs of this slowing down despite what’s happening in the economy and the news,” he says. “I have my fears, when it comes to inflation, interest rates, energy prices and build costs and I feel there must be a pinch point. But for now people are brave, businesses are booming and we are overwhelmingly busy.”

Nottinghamshire at a glance

Average achieved rent in 2021: £16.02 per sq ft
Average yield: 7.35%
Investment total: £157.5m
Number of deals: 124
Some 10.4m sq ft of space got the go-ahead in 2021, through 1,164 applications. The majority of space permitted was for industrial development (5.4m sq ft), with office permissions totalling 1.3m sq ft and residential 1.6m sq ft. Some 7.2m sq ft of new space is expected to be delivered in 2022 across 305 schemes. Industrial will comprise 3.4m sq ft of this and offices 1.5m sq ft.