Rent levels for prime office space in Nottingham have increased
by five per cent throughout the recession, according to new
research from national commercial property firm Lambert Smith
Hampton (LSH). But a lack of quality space in the pipeline could
mean that a supply problem is looming.
The figures are in marked contrast to rent levels in Birmingham
city centre and immediate surroundings, which have fallen by nearly
20 per cent since the highs of 2007.
LSH's latest Midlands Office Market Report reveals that rents
for prime office space in Nottingham have increased by as much as
five per cent to around £19.50 per sq ft. Take up for the
first half the year was below par but current activity suggests
that the second half will be better.
But the LSH report confirms fears that the Nottingham, along
with Birmingham and the West Midlands, will face a shortage of
Grade A office space in the coming years as demand outstrips
supply. Take-up is strong and supply of prime space is unlikely to
be able to keep up, with very little new development in the
pipeline. The result will be higher demand for good quality
second-hand space, but much of the space available is of inferior
quality and this could hamper future activity in the region.
Philip Quiggin, Director in the Nottingham office of LSH said,
"The office sector in the region has undoubtedly felt the impact of
difficult market conditions over the last two years but rents have
shown a small increase. However, most space available is
second-hand space and much of it is inferior."
Ian Leather, LSH Head of Office for the region said, "We've seen
a limited appetite for speculative development, and new-build
schemes are unlikely to get off the ground without pre-lets in
place. This means higher demand for second-hand space, but there is
a looming supply problem with much of the space being outdated or
unfit for purpose."
He added, "There is a need for landlords to look at
comprehensive refurbishment options if they are to attract
occupiers who have been unable to find suitable Grade A or Grade B
space."
For more information about Lambert Smith Hampton, please visit
their website here: www.lsh.co.uk