The commercial property market appears to be booming in Leicestershire after investment almost doubled to £629m last year, compared to 2020, according to data from by East Midlands property agency Innes England.
It said investment in the industrial sector accounted for almost three-quarters of the figure, at £480 million, which was up nearly three times on the previous year – thanks to a number of huge warehouse deals.
The figures, revealed in Innes England’s recent Market Insite report, suggested that commercial real estate investment across the wider East Midlands reached a record £2.29 billion in 2021.
In Leicester, the report highlighted:
Logistic deals included Amazon’s one million sq ft warehouse at Bardon, bought by Savills IM for £161 million; Aberdeen’s £103 million purchase of Amazon’s facility at Hinckley and Blackbrook’s £101 million acquisition of Skygate at East Midlands Gateway
The £168 million Fosse Park extension added 140,000 sq ft of new retail and restaurant space, including Next, TK Maxx and H&M
More than £17 million of the £45 million which Leicester City Council secured from the Levelling Up Fund will go towards the railway station’s regeneration plans
The first unit of 75,000 sq ft in the final phase of the Leicester Distribution Park, on the Braunstone Frith Industrial Estate, has been taken by Piping Rock UK Limited
The reopening of non-essential retail and the relaxation of restrictions on hospitality led to increased footfall, with the city at 93 per cent of pre-pandemic levels
Investors piled a further £128.5 million into bed space across the student and build to rent sector
Two shopping centres were sold – Fletcher Mall to property investors Cervidae and the Haymarket Centre to Leicester City Council
In the industrial take-up market, Leicestershire recorded a modest drop of 5%, reflecting the development of schemes at Magna Park, Bardon, Hinckley and Ashby and others near the city.
Ben Robinson, head of Innes England’s investment consultancy, said: “This is yet more evidence that industrial continues to go from strength to strength with finite stock continuing to harden yields.”
The report said supply was the key factor in keeping the industrial market moving.
Peter Doleman, Innes England director of agency and development, said: “Leicestershire is once again skewed by the big box market, where 2.5 million of the total 3.5 million sq ft of year end availability is recorded within buildings over 50,000 sq ft.
“Overall, supply remains broadly the same as 2020 at 3.2 million sq ft.
“The significant change within the Leicestershire market for this year will be the availability of a number of new speculative schemes, with Chancerygate now building out on site in Wigston, Canmoor on the Whittle Trading Estate in Whetstone, Jelson continuing phased development at Broughton Astley and Venture hopeful of planning consent to begin a new industrial development in Fleckney.
“These are smaller industrial units – larger units up to 150,000 sq ft will soon be available on the Leicester Distribution Park in Scudamore Road, due for completion in March this year.”
The report to the Market Insite webinar highlighted the fact that second-hand stock remained “painfully thin on the ground”.
In the office take-up sector, Leicester has seen significant activity – jumping from 193,000 sq ft to 429,000 sq ft, an increase of 122 per cent.
Lettings included 20,000 sq ft to Watches of Switzerland and 34,000 sq ft to Nova Systems at Carlton Park near Narborough.
“No.1 Great Central Square was taken in part by Europcar and the largest letting was in Loughborough, with Charnwood Molecular acquiring 62,000 sq ft within the former AstraZeneca complex.”
Matt Hannah, Innes England’s managing director, said Leicester’s recovery from the pandemic had been a positive one.
He said: “The city centre is robust, and needs to be, with the opening of the £168 million Fosse Park extension.
“The last six months have seen strong sales growth for a number of retailers across the region from pre-pandemic levels and whilst they would love the market to stay sustainably larger, they are not counting on it.
“Looking at further sectors of the retail property market, the destination retail and retail warehousing sector is healthy and investors are back looking to secure assets.”
