THE effects of the global economic downturn have ricocheted across all sectors of Leicestershire's commercial property market over the past 18 months, with nowhere more prevalent than the freehold sector. 

As a result of the continued squeeze on credit, and the poor economic and general business outlook, freehold sales of commercial property across Leicestershire dropped to an all-time-low.  

However, recent readjustments in property values and signs of a return of confidence have led to signs of increased demand for industrial premises according to national commercial property consultancy, Lambert Smith Hampton (LSH).

Agents at LSH's Leicester office have recently witnessed signs of life in the beleaguered freehold sector, with one notable recent transaction to the manufacturer's of one of the world's fastest cars, Noble Automotive.

Acting on behalf of a private property investment company, joint agent Richard Brudenell Chartered Surveyors agreed a surrender of the existing lease, followed swiftly by a deal in conjunction with LSH for Noble to acquire the freehold interest in 24A Centurion Way at Meridian Business Park.

The firm will relocate from its home in Barwell to the 22,494 sq ft unit on the popular distribution park, which sits on the main axis of the M1/M69 corridor, to accommodate plans to produce its latest supercar, the M600.

Geoff Gibson, Head of Office at LSH Leicester, said: "The recent freehold sale at Meridian Business Park is the first to be completed in respect of a sizeable modern warehouse/industrial unit for some time

"As enquiry levels for purchasing begin to increase, albeit ever so slowly, there is a definite feeling that both prices and the market has hopefully stabilized. Without wanting to appear too overly optimistic, we believe that 3Q 2009 could very well have seen the bottom of the market."

However, recovery will be slow and there are still signs of uncertainty from purchasers and inability to raise finance, with vendors often being reluctant to sell at what may appear to be at low level's. There is also the feeling that more properties will be coming available once there is further improvement due to the banks pushing more stock onto the market. This may hold back recovery.

"Prudent occupiers who have put plans to purchase their own premises on hold while the market recovered should be encouraged by the deal at Meridian Business Park," said Gibson.

"Freehold prices in Leicestershire have returned to more realistic levels reminiscent of four- five years ago.  While this is clearly not fantastic news for all concerned, it will provide the sector with the public display of confidence it has so desperately needed. "