Despite political headwinds, the East Midlands market will continue to grow on the back of a strong 2018, says JLL at its annual property predictions.
Matthew Smith lead director of JLL’s Nottingham office said the pre-let to HMRC of 276,000 sq ft and Sladen and Peveril’s Unity Square office development, bringing 4000 people into the south side regeneration area had created a catalyst for future growth and would attract further investors to the city.
He also stated that the commitment to build Bildurn’s Station Street, Miller Birch’s Guildhall Place or Henry Boot’s and Nottingham City Council’s Angel Row scheme would also push Grade A into the market in 2021 and create a further jump in prime rents, predicted up towards £25 per sq ft.
Smith said: “In 2019 however, as Grade A supply levels still remained low, high quality speculative office refurbishments will continue to dominate the market and in the main be rewarded with long term lets, with rents continuing to gain the record levels achieved last year of £20 psf across 29,000 sq ft at the Royal Standard Place.
“Changing occupier demand will also be a significant disruptor in the East Midlands market and increasing demands for flexible working, technology and a drive for smarter buildings will influence the types refurbishments, new build delivery and landlord behavior as we move through 2019 and beyond.”
On the residential side, Smith said he believed 2019 would see the rebirth of aspirational high-end living in Nottingham.
“Target locations focused on good transport networks and brownfield sites around the station have been the first schemes out of the ground. “ said Smith. “However, demand will shift attention to other areas around the city, attracting more developer competition and help increase land values.”
Demand for student accommodation development sites is also expected to remain strong over 2019, with some major schemes within the city coming forward this year.
On the industrial side, Smith said he believed the Golden Triangle was redefined in 2018 on the back of the Segro Logistics Park East Midlands Gateway scheme, attracting significant occupier interest from launch. This contributed towards the East Midlands having the highest level of regional big box take-up within the UK at 9.6m sq ft, 43% of total UK take up.
“We believe 2019 will be a repeat performance,” added Smith. “Occupier demand will remain robust, with the delivery of some of the largest speculative buildings to date, including 550,000 sq ft at Panettoni Park Eastwood, 372,000 sqft at Derby Commercial Park and 530,000 sqft at IM Properties, Hinckley Park.
“New schemes coming forward such as Henry Boot’s New Horizon in Nottingham and Wilson Bowden, Peveril Securities and Cedar House Investments in Infinity Park Derby will continue to help meet occupier demand in the region.”