Office opinion: Why city needs to look after its growing businesses
THE credit and risk software and services giant TDX recently relocated to new offices on Fletcher Gate. The firm had outgrown its previous site – and needed to relocate to larger premises at The Pod. TDX is one of Nottingham’s most prominent home-grown firms, on track to be the city’s next £100 million business, and took up 18,000 sq ft of leading edge office space in the Fletcher Gate building, providing working space for more than 200 people.
The Pod is high quality office space and thankfully answered the brief of TDX but, the big question is, just where is the high quality office space to accommodate other growing businesses in Nottingham?
It’s vital that we keep our talent local, says Craig Straw of Innes England, and assist in keeping our growing businesses in Nottingham. There are challenging times ahead for the city’s office market, he says.
Craig says: “There was a muted start to the office market at the beginning of 2012, with take-up rates for the city and the fringe at 24,000 sq ft, compared to the average over the same period of the first quarter of 2011, which was in excess of 100,000 sq ft. The second quarter picked up with some larger deals taking considerable amounts of space out of the market and in the last six months we’ve seen significant levels of activity.
“There has been a sharp increase in the last couple of months, with a number of noteworthy lettings including the Land Registry’s commitment to 45,000 sq ft at Castle Wharf. TDX took 18,000 sq ft at The Pod and then the Nottingham Post moved in to 13,000 sq ft at City Gate. There was also an assignment between government departments, at the site of the former emda building.
“A common feature of the market in recent years has been a slowdown in activity over the traditional holiday period, which has been particularly marked this year, and the market is eagerly anticipating how things will develop over the critical last quarter of the year.
“As a result of these substantial deals, we’ve seen a continuing reduction on the supply side, in grade A stock which is now particularly scarce in the city. There is second-hand space coming back onto the market but this tends to be poorer quality stock which is often going for alternative uses such as student residential.
“TDX started its search against a backdrop of diminishing supply and spent a great deal of time identifying the available options. It begs the question, when someone comes along with another 20,000 sq ft building requirement, how many options are realistically available? TDX is the perfect example of a home grown success story but not isolated in being the only successful business in the city needing space to grow. They have grown enormously and this is the latest in a number of moves from the firm’s beginnings in Nottingham. Looking forward, the challenge for the city, given the lack of supply of good quality accommodation, is to ensure the product is there to enable TDX, and others like them, to move on again and continue their growth within the city.
“It’s a real challenge for the city, and I think that if we look at what’s happened in the industrial market for a minute, then we can see that there has been a lack of supply of new product in Nottingham over the last decade, which has meant that growth either hasn’t taken place – or has taken place by relocating outside of the conurbation – principally to North Notts and the surrounding areas, where there has been the land supply.
“So the city needs to address the issue of lack of supply of good quality office space, particularly large floor plates if it is to prevent inertia in the office market where growing businesses will become frustrated if they are unable to realise their growth aspirations and potential – and may have to take the decision to move out of the city in order to facilitate this.”