PRESTIGE QUARTER COMES BACK INTO PLAY AS THE ECONOMY LEVELS OUT

Office News

For some businesses, it used to be commercial property’s equivalent of things that dreams are made of. But changed market conditions mean an address near Nottingham Playhouse is no longer out of reach, says MARK TOMLINSON.

Elegant streets, period facades and front doors straight out of Downing Street… it sounds like the stuff of dreams for most professional businesses. And for a long time it was in Nottingham, with properties situated in the handsome terraced streets radiating out from Wellington Circus commanding some pretty handsome rents and freehold values.

For decades this quiet corner of the city has been established as Nottingham’s traditional professional quarter, with the area bordered by Park Row, The Ropewalk and Derby Road occupied by accountants, law firms, private clinics and a range of property and development businesses. The location is discreet, and the buildings prominent without being ostentatious.

It retains that sober, professional demeanour to this day. But the price that comes with exclusivity can sometimes work against you, and the immediate aftermath of the credit crunch saw vacancy rates and void periods for properties in the professional quarter start to rise as businesses which might once have looked at this location opted instead for office parks on the fringe of the city centre which offered Grade A accommodation and more flexible open plan accommodation.

Even in the good times, the period buildings in the professional quarter would have struggled to match the flexibility and specification of office parks. But they do offer something else, which is an upmarket environment surrounded by some excellent amenities, ranging from the established Hart’s restaurant and Cast Deli through to the recently-opened Browns Brasserie. Just a couple of minutes’ walk from the city centre, this is the long-established meeting place for the city’s professional services and much of the city’s business is done in these streets.

All the evidence is that much business is now being done in these streets again. In a classic demonstration of the economy rebalancing itself to bring price expectations back in tune with what the market can bear, there has been a correction in rental values in Nottingham’s professional quarter. The result? There have been 20 office transactions in the area during the last 12 months as small to medium-sized businesses, previously based in secondary locations and who thought a prestige address was out of reach, have realised one of the city’s most well-established location is both financially accessible and professionally viable.

Businesses now enjoying the benefits of the professional quarter include the investment research and representation business Hallbrook Partners, financial advisory firm Wallwood Independent, the international translation business EVS Translation, and The Yamaha Music School. All are benefiting from a prestige location and all the benefits that go with it.

Landlords who have accepted the rental correction which took place over the last three years now have less to worry about when it comes to assessing void periods. In fact, the main concern now is that the number of deals that have taken place over the past few months means there is now a shortage of supply.

While the majority of the movement in the professional quarter has been down to rental deals, buildings which have an enduring appeal mean there has always been regular demand for freehold opportunities. They are few and far between though, with many freeholders having little appetite to sell in suppressed market conditions. One of the few available at the moment is 36 Regent Street, it’s a rare opportunity for all sorts of reasons – a freehold detached period building which is high quality and has ample parking. We were instructed to take it to market only recently but the levels of interest have been predictably high, and with settled tenants in place this is an interesting investment opportunity.

The story of Nottingham’s professional quarter is the story of a truism: in the long run, quality always sells.