Strong demand for big warehouses, logistics centres and student apartments have dominated big real estate deals across the East Midlands in the first half of 2022.
According to commercial property specialist they accounted for 85 per cent of all transactions. Although the total £1.044 billion total value of deals was down 14 per cent on last year’s record-breaking figure, it was still a third up on the five-year average, according to the firm’s first mid-year Market Insite report.
Ben Robinson, is investment director at Innes England, which has offices in Nottingham, Derby and Leicester. He said: “Following record levels of commercial real estate investment in the East Midlands in 2021, the first half of 2022 has continued in much the same fashion.
“We are still seeing very competitive bidding in the sub-£5 million market, particularly in the industrial and beds sectors. Again, that market has dominated the activity.”
He said key logistics deals in the East Midlands this year included:
- ICG Real Estate’s £101 million purchase of more than 500,000 sq ft of space at Mercia Park in Swadlincote
- Urban Logistics REIT’s £41 million acquisition of the 670,000 sq ft East Midlands Logistics Hub near Melton Mowbray
- Realterm Global’s £19 million purchase of a 240,000 sq ft facility at Forbes Close in Nottinghamshire
A number of key purpose-built student accommodation (PBSA) deals in Nottingham have taken place in 2022, including Bricks Group’s £70 million purchase of the 783-unit student scheme at the former Royal Mail sorting office in Bath Street.
Other PBSA deals in the city included the £59.8 million sale of a 483-unit student block in Ilkeston Road to UBS; Unite Group’s £34 million forward funding of a 270-bed student scheme in Lower Parliament Street; and Patron Capital’s £24.5 million purchase of a 420-unit student accommodation scheme at Madison Gardens.
The report also highlights investments at Derby’s Pride Park – home to prominent companies like Rolls-Royce and Toyota. Assets brought to market there include the Travelodge, for £5.1 million, and Euro Garages & MKM Supplies for £7.6 million.
Other big transactions in Derby included BMO’s purchase of Orion One & Two at Markham Vale for £44.5 million, PCT HealthCare’s purchase of a purpose-built warehouse at Horizon 29 for £17.9 million and Northern Trust’s purchase of Raynesway Park for £9 million.
Leicestershire continued its industrial focus with the conclusion of another forward funding deal at Cross Link 646, between Leicester and Loughborough, which saw two industrial units totalling 128,000 sq ft purchased by London Metric for £16 million.
The living sector Leicester saw a number of forward funding deals, including Saxon House, the former HM Revenue and Customs building where Oblix Living has sold a 102-unit scheme for £25 million and Cinnamon Care Collection’s purchase of a 73-bed care home scheme on Uppingham Road from Charterpoint Senior Living.
Nottingham’s office sector remained popular with investors, with deals featuring Corum’s purchase of EON’s Trinity House HQ for £28 million in May.
Nottingham’s out-of-town business parks saw significant transactions, such as Specsavers’ £13 million purchase of The Arc on NG2 Business Park for part occupation and part investment, the Speedo House £8.6 million sale to KJS and PMW Property’s purchase of The Curve for £5.63 million.
Mr Robinson said: “These transactions demonstrate that there remains plenty of investor demand for city centre offices and well-connected business parks, despite the much talked-about shift to hybrid working patterns brought on by the pandemic, which some commentators expect to temper office returns.”
Matt Hannah, managing director at Innes England, said: “We are seeing significant investment in the East Midlands commercial property market and this is an ideal time for our dedicated investment department to take stock of how things are evolving.
“Many clients will be reviewing their investment criteria mid-year to see where they've been allocating funds and to consider where their focus will be in the latter half of 2022.”
