Insider Media Limited

Despite numerous challenges over the past year, Nottingham’s property market has remained “resilient”. That’s the opinion of Helen Longstaffe, head of business space agency at DTZ in Nottingham. However, Longstaffe said an absence of substantial new development within the city centre could cause “concern” for the industry over the next few years.

Longstaffe said the shortage of any major new developments would mean the supply of grade A accommodation will continue to fall over the next few years. This would force large occupiers with a lease event during this time “to actively consider their strategy in 2011”, she predicted.

Overall take-up during 2010 within the city centre reached 250,000 sq ft which is above the long-term average, said DTZ.

Big deals during 2010 included E.ON acquiring a 105,000 sq ft pre-let at the Guildhall site, Ikano acquiring 17,300 sq ft at Waterfront House and Crytek acquiring 17,500 sq ft at Southreef.

Longstaffe said: “The market has, however, faced numerous challenges. The build up to the general election caused a number of large occupiers to delay implementing their property strategy, and a combination of the emergency budget and the largest public sector spending cuts since 1981, caused consumer confidence to hit a 18-month low during the autumn period.

“Concerns about future occupational demand and the significant levels of supply evident in the market have resulted in an environment where extremely competitive terms are available.”

The property agent said it expects demand during 2011 to originate from “a wide range of sectors” and the general level of demand will remain “steady” during the first six months.

Philip Glenn, head of the DTZ Nottingham office, said another problem facing the property market throughout the second half of 2010 was funding from banks. He said that lending had “tightened considerably” with all the major high street banks looking to regear facilities or preferably exit existing loans.

Glenn said: “Speculative development funding is non-existent with pre-let developments experiencing difficulties in obtaining funding. The fragility of the occupational property market is not assisting the ‘risk factor’ that is inherent within any property development appraisal. This is making some schemes unfundable or leads the banks to suppress land values, which in turn, is stalling land transactions.”