COMMERCIAL Secretary to the Treasury Lord Deighton has heralded the East Midlands as an “excellent place to invest” – and said HS2 would help unlock even greater growth in the region.
Speaking as a guest at Market Insite, an event held in London by Midlands commercial property company Innes England, Lord Deighton said that investors are increasingly looking outside London for value and opportunity – and that the East Midlands was making the most of this.
In the Innes England report, which takes an in-depth look at the East Midlands property market, found that the region was a star performer in 2014, emerging as one of the strongest regional economies outside of Greater London.
Innes England, which has offices in Nottingham, Derby and Leicester, has been monitoring the regional property market for more than a decade. This year’s report showed increased levels of speculative development and refurbishment across the region, investment sector leads the way as confidence returns to the market and multi-million pound investments in transport and leisure delivering excellent facilities across the region, with more to come in 2015.
Tim Garratt, managing director at Innes England, said: “The East Midlands has really pushed itself to the fore during 2014, emerging as one of the strongest regional economies in the UK, and the property market is undoubtedly reflecting that.
“Commercial property prices are approaching pre-crash levels in some sectors in the region and the UK is set to power ahead in 2015. The mood across the East Midlands property market is a positive one, as we look ahead to what is set to be an exciting 2015.
“A number of significant projects across the region reached completion last year, with many set to take strides forward over the coming months.”
Lord Deighton, who is the Minister for UK infrastructure projects, said: “The potential location of a station in the East Midlands is a key issue. An East Midlands hub is essential. It is important to choose the right location and discussions on this are now underway.”
He said it wasn’t all about HS2. There is the £500 million extension of rail electrification from Bedford to Nottingham, as the first phase of the ‘Electric Spine’ programme which will see the whole of London to Sheffield route electrified.
“Add to that, major investment in the road infrastructure in the East Midlands, such as the A453 widening due to be finished later this year and which improves access between Nottingham and the M1. Through growth deals announced in July 2014, the Government will invest more than £17 million in projects across Derbyshire, Leicestershire and Nottinghamshire to fund a wide range of projects unlock local growth.”
The Innes England report found that activity levels across key sectors of the property market continued to improve throughout 2014, illustrating a return of confidence from businesses and investors as the regional economy continues to grow.
Tim added: “The market in the East Midlands has not been subject to the fluctuations experienced in the South East, and we could well see the regions come further to the fore in 2015 as domestic institutions look outside of the over-heated London market to invest in higher yielding markets.
“Political focus on the regions could also have a hugely positive impact on the East Midlands, with devolution a real buzz word outside of the capital at the moment.”
The report highlights a series of key projects that have given the property sector in the East Midlands a boost during the last 12 months, including the completion of the £27m sports arena and velodrome on Pride Park in Derby and key investment in the region’s retail sector.
Tim said: “Over the course of 2014, work on a number of significant projects for the region has begun and, in some cases, completed. For example, in Derby, Compendium Living’s £100m Castleward regeneration scheme is also nearing completion with sales rates on the residential element ahead of predicted levels and interest in the commercial space significant.
“In Nottingham, improvements to the retail offering are well underway with the £40m redevelopment works at intu Victoria Centre set for completion in December, with a range of new restaurants due to open in time for Christmas. Plans for a multi-million revamp of intu Broadmarsh are also due to be submitted for planning in the early part of this year too.
“Leicester has also had a very positive year, recording the highest takeup of office space for three years with the largest letting a 45,000 sq ft until at St George’s Tower to Study Group. Investment levels in the city were also high, recording transactions of £731m with the showpiece the sale of the remaining 40 per cent stake in Highcross by Hammerson.”
It is anticipated that 2015 will see continued improvements across the market in the East Midlands, with a number of important schemes already well underway across the region.
Tim said: “One of the biggest challenges facing the market at the moment is a lack of good quality stock, but already a number of schemes have been announced to deliver high quality space throughout the East Midlands.
“In Derby, stock levels will be boosted following plans laid out by Goodman and Anglesea Capital to deliver an initial 930,000sq ft of logistics space in 2015, which will include a 323,895sq ft unit at Derby Commercial Park.
“Meanwhile, in Leicester BlackRock and Graftongate Developments have submitted a planning application to develop almost one million sq ft at Sunningdale Business Park.
“In Nottingham, the return of speculative refurbishment has already begun to supplement stock levels in the city, a trend that I fully expect to see continue during 2015, not only in Nottingham but across the region.”