As East Midlands niche agent Innes England braves the snow this morning (and for the rest of this week) to unveil its annual Market Insight report across the region's three main cities - Leicester Derby and Nottingham - over the next three days, here is a précis of how the region fared in 2012 and what could be interesting for the year ahead.
Robert Hartley, managing director at IE, says: "Making predictions for 2013 is difficult as we have seen several years of poor economic conditions. As a result of a lack of development in recent years, there is an emerging dearth of quality space across all sectors. Ultimately this will result in rents rising and pump prime speculative development."
The report states that the East Midlands economy is holding up however, compared to the rest of the country. With the continuing work of the LEPs and the Leicester and Nottingham enterprise zones, millions of pounds in funding from central government through LEPs and the Regional Growth Fund has been sourced.
Matthew Hannah, director at IE says vacancy rates are the biggest issue facing the retail market across the East Mids. Meanwhile,pro-active management still offers investors the opportunity to improve short, medium & long term capital values whilst maintaining cash-flow, says director Tim Garratt.
Nottingham highlights:
Industrial market remained strong in 2012 with take-up at 971,000 sq ft - 28% higher than the previous 12 months. Rents held steady at £5.5 per sq ft for the third year in a row
Supply drops to 2.1m sq ft - its lowest level since 2008. Only 116,000 sq ft is grade A.
Office take-up levels fell short of the 10 year average for the first time in four years with take-up at 438,000 sq ft.
Availability - 2.4m sq ft total supply at year end 2012. Supply of grade A space continues to tighten with a reduction of 17% to 370,000 sq ft
Rents remained stable at £19.50 per sq ft
Retail - continued high vacancy rates. Prime zone A High Street rents at 205.00 per sq ft
Derby
Office market best described as 'patchy' during 2012 with take-up flatlining at circa 200,000 sq ft, marginally down on the long term average of 220,000 sq ft
Prime office rents remain at £16.50 per sq ft
Industrial take-up dropped significantly to just under 400,000 sq ft. Very little good quality stock available as supply dropped by 15%
Retail suffered a turbulent year, but steady take-up of vacant units on flexible terms with incentives. Westfield continued to drive footfall. Prime zone A High Street rents £150 per sq ft
Total availability fell by 6.5% to 553,000 sq ft with both grade A and secondary space down by 9% and 59% respectively. Derby dominated by poor quality second hand office stock.
Derby awarded £40m from the Regional Growth Fund.
Leicester:
Industrial take-up down 13% to 1.9m sq ft, but remained in excess of long term annual average of 1.4m sq ft
Falling levels of industrial/distribution availability now a concern as almost 1.2m sq ft removed from the market since 2010. Supply also an issue with only 38,400 sq ft of new space available
Office sector saw a 22% drop in take-up, though remains in line with 10-year average at 340,000 sq ft pa. Out-of-town offices more active, accounting for 86% of all take-up. Overall availability increased by 1.37m sq ft.
Prime office rents remain at £16.50 per sq ft
Highcross continues to dominate the retail landscape in Leicester. Prime zone A High Street rents remain at £195 per sq ft
IE's Hartley believes there is "some prospect of economic growth" in 2013. Let's hope this translates into increased confidence and ultimately, activity.
Recent Comments