East Midlands’ commercial property market attracts £1.35bn in investment
A new report has revealed that the East Midlands commercial property market bucked the national trend last year, attracting an impressive £1.35 billion in investment.
According to Innes England’s 13th Market Insite report, investment in commercial property fell by over 20 per cent across the UK, but despite the challenges posed by political uncertainty the East Midlands remained level.
Nottingham experienced record levels of investment, with the overall value of transactions totalling £513.2 million – an increase of 126 per cent on the previous year – while investment in Derby rebounded to its highest level since 2013-14. £281 million worth of transactions were completed in the city in 2019.
Take-up of office space in Nottingham fell below the 10-year average after hitting record highs in the previous 12 months, but this was offset by the return of cranes to the city skyline.
In Leicester, the take-up of Grade A industrial space increased by 96 per cent, boosting investors and developers who built speculative units.
Meanwhile, prime industrial rents hit new peaks in all three cities, driven by a lack of supply.
Matthew Hannah, managing director at Innes England, said: “2019 was turbulent and filled with political uncertainty but despite this, the East Midlands commercial property market is generally performing well. Most importantly, the region continues to house a range of outstanding businesses across a variety of sectors.
“Investment in the region remains strong, with notable transactions being 578,000 sq ft to the VF Corporation at Bardon in Leicestershire; Aver Properties’ forward purchase of the final phase of Henry Boot Developments’ Markham Vale North scheme at Chesterfield in Derbyshire; and the £120 million sale and leaseback of the 1.8 million sq ft Sports Direct headquarters at Shirebrook in Nottinghamshire.
“Alternative sector investment also continued to play a significant role, particularly in Nottingham thanks to the £45 million forward purchase of the student accommodation scheme at York Place Nottingham by Brookfield Asset Management.
“In all three cities, prime industrial rents hit new peaks, which were driven by limited availability and strong demand in the sector. There was also significant development in the industrial market, and Leicester experienced an incredible 96 per cent increase in the take-up of Grade A industrial space.”
The report also highlights the problems facing the region’s retail sector, which continues to be afflicted by changing consumer habits. However, Innes England says there are “positive signs” for the sector across Nottingham, Derby and Leicester, which all welcomed new retailers including Hugo Boss, Cosy Club and Tim Hortons last year.
