Harris Lamb has called on developers in the East Midlands to recognise the shortfall in high-spec office accommodation in Nottingham and invest in speculative development and high-level refurbishment to meet the demand.
The business says that developers are currently ploughing their efforts into providing student accommodation in the city but that as the marketplace became increasingly saturated, they should focus on addressing the shortage of Grade A and B office space available.
Rob Haigh, of Harris Lamb’s Nottingham office, said “The last year has seen a large number of both new-build and conversion-led student accommodation opportunities within the city and whilst there is a high level of demand from developers at present, such is the level of activity, it is arguable that supply will begin to outweigh demand for these spaces within a relatively short space of time.
“Weigh that up against the current office market in the city – which is typified by a steady, active demand, but a lack of good quality stock – and the next wave of investment and development becomes clear”
He added that recent relocations by Seimens and Homeserve into 30,000 sq ft offices in the city highlighted the demand for space in the city.
“CoStar currently lists around 500,000sq ft of available office space in the city, and while the true amount of space is far lower due to the shifting void rates in multi-let properties, there are three key reasons for a property remaining available for a period of time; lack of occupier demand, over-valued property or sub-standard specification.
“While occupier demand is clearly not the problem, the lack of available Grade A and B space, and a reluctance to speculatively create it, is,
“The lack of availability is pushing rents upwards and with demand squeezed yet further by the lack of suitable Grade B opportunities coming to market as well, developers have two clear calls to action – to recognise the demand and create speculative developments to fulfil it, or the somewhat more economical and safer solution of refurbishing and upgrading office space to provide a specification suitable for the modern business, at a competitive rent,” said Rob.
Ken Nettleship, of Invest In Nottingham agrees: “Invest In Nottingham currently has a very active pipeline of businesses interested in locating or expanding their business in Nottingham. Whilst there are several great opportunities for companies looking for new office space in the city, there is still space that doesn’t meet the demand of the modern occupier.
Some of the recent speculative refurbishments at Royal Standard Place, Fothergill House and Canalside House are encouraging and we would hope to see more examples of this coming on to the market over the next year.
“We would also hope to see some new developments coming out of the ground in 2018/19 to help to meet the growing demand for high-quality space in Nottingham”
Rob added: “As supply outstrips demand in the residential conversion market, we very much hope that developers will begin to seek alternative opportunities, within the city centre, and turn their attention to the office space sector.”