The East Midlands market is turning a corner. While it’s fair to say the region will never reach the heady heights of London, or for that matter its West Midlands cousin, Birmingham, for the first time in a long time, speculative office development is happening in Leicester, earlier this month Nottingham netted its biggest city centre office deal in four years and the city’s retail woes finally appear to be coming to an end. Add to the mix a number of major infrastructure works coming to fruition across the region and on-going regeneration gathering pace in Derby and Northampton and it looks as if, finally, there is to be some gain from all the pain of the past six years.
Agents and developers alike are poised to breath a cautious, but collective, sigh of relief that the market is once again moving – albeit at a glacial pace. In Leicester, Dunelm-backed Marlborough Property Group is building the city’s first substantial spec development for around 15 years due to a perfect storm of a spec development drought coupled with pent-up demand. Market observers are hoping this will open the floodgates for further such development in the region.
Meanwhile, Nottingham’s city centre office market, which quite frankly has been almost non-existent for years barring the odd, interesting deal (think E.ON) has had two recent shots in the arm – one in the form of office refurbishments and the other a whopping 62,000 sq ft letting by private Leicester-based property company Charles Street Buildings Group to Parexel at 2 Castle Wharf as exclusively revealed in EG (4 October 2014, p49).
Rather than tired, old, stock going over for conversion into student accommodation, as has been the trend in recent years, suddenly there are four new refurbs totalling a respectable 185,000 sq ft that are staying as, well…offices. Not only that, but these deals are being financed via London-based firms such as F&C Reit and fund manager CCLA. Again, the market is watching and waiting to see if this could be the start of further London-based inward investment into the region.
But let’s not get ahead of ourselves. There are still many challenges to face and disappointments to overcome. Sadly, Derby missed out in housing the new HS2 National College, as Doncaster and Birmingham won the requirement and also, disappointingly, brewing giant Carlsberg announced it has abandoned plans to build a 640,000 sq ft distribution facility at Roxhill’s Brackmills development in Northampton.
Every region has its successes and failures. Perhaps at long last, the balance in the East Midlands market is tipped in favour of the former rather than the latter.
