Logistics and residential schemes driving market

A surge in demand for logistics and residential schemes dominated commercial real estate deals in the region in the first half of the year, according to a new report.

In Innes England’s latest Market Insite snapshot review of activity across Derby, Nottingham and Leicester, it found that they accounted for 85% of all transactions.

And although the total investment volume of £1.044 billion was slightly down by 14% on last year’s record-breaking figure, it was still significantly up on the five-year rolling average, by 34%. 

Ben Robinson, investment director at Innes England, 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.” 

The mid-year report highlights investments at Derby’s Pride Park – widely regarded as one of the most successful business parks in the UK.

Assets brought to market include the Travelodge, for £5.1 million, and Euro Garages & MKM Supplies for £7.6 million. 

Other notable industrial transactions in Derbyshire 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. 

It is the first time Innes England has published a mid-year report, following the 15-year success of its annual review of the market across Derby, Nottingham and Leicester that provides an insight into a range of sectors including office, industrial, retail and investment markets.  

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.”