FHP PROFESSIONAL QUARTER REVIEW 2013

Office News

Some parts of the commercial property market never really lose their appeal and the traditional professional quarter of Nottingham has to be one of them. This is the part of the city full of attractive period buildings bordered by The Ropewalk, Derby Road and Park Row which has traditionally been home to Nottingham’s professional advisory community, ranging from architects, barristers and engineers to financial advisers and property firms – and more.

 

2012 saw the first signs that this market was picking up, and the demand has been healthy again in 2013 – if not quite at the levels it was in the previous 12 months. But I don’t see that as another dip – to me, this year’s slight drop in transactions is due to the ebb and flow that comes with the usual rises and falls in supply and demand. In other words, the market is back to something resembling normality.

The amount of space taken up this year has been around the 15,000 sq ft mark. That may not sound huge, but these are not massive buildings and their historic nature means that it isn’t always easy to find a property that suits the requirements of a specific client.

Nevertheless, we’ve seen some good activity – the consulting engineers Curtins have expanded on The Ropewalk, doubling the amount of space; Pathway Care Solutions have done the same by acquiring a building on Regent Street; BSP has also acquired a property on The Ropewalk. We have also seen a number of properties converted for residential use, reducing availability of traditional office space in the area.

It remains a tight market at the moment because there is roughly 40 per cent less stock available in the professional quarter than there was a year ago. That means less choice for prospective occupiers, but at this stage though it probably doesn’t mean higher rents – instead we are seeing incentives on leasehold transactions reducing and freehold values creeping up.

This particular part of the commercial property market is driven largely by owner-occupier demand – business owners who want to invest in bricks and mortar whose operations don’t necessarily need the large floorplates and flexibility of a conventional office building. As a result freehold opportunities continue to be snapped up quickly with investors being priced out.

Occupiers who like a discreet presence in a period building don’t grow on trees. But this remains an exclusive and attractive location and as the market continues to recover well-presented properties in an upmarket central location will remain popular.