Take-up across the six Midlands markets was at its highest since 2000, a trend that is set to continue throughout 2016.
Nottingham saw an increase in activity in 2015, now well above the 10-year average. 37 Park Row, Nottingham, is now fully occupied following refurbishment, with Thompsons Solicitors taking the last 6,000 sq ft.
There is absence of speculative development, though, which has led to lower than expected take up in Q1 2016. With a number of new requirements for high quality office accommodation in the city centre, the case for speculative development has never been stronger.
Prime rents in Nottingham look set to rise significantly through 2016 as competition increases for limited supply.
Phil Quiggin, director of office agency at LSH in Nottingham, said: “The demand for high quality central office accommodation in Nottingham is huge, making it a great time for speculative development. Businesses are growing increasingly confident in expansion and subsequent office upgrades across the UK regions and the strength of activity in Nottingham city centre reflects this. The rent increase needed to justify new development has been a sticking point for some time but market dynamics now appear in line to substantiate a significant rise in rents.”
Nationally, office take-up was at its highest since 2001, surpassing 2014’s high by 4%. A fall in availability reflected not only healthy net absorption, but also pressure for alternative uses. Speculative development is up by 19%, with developer confidence in the regions restored. The UK office sector is firmly in the midst of a rental growth cycle, with prime headline rents on the up across the majority of UK markets.