The last three months of 2014 saw a stellar uptake of office space in Birmingham, a report from national property consultancy Lambert Smith Hampton (LSH) has revealed.
The Q4 Office Market Pulse for the city has revealed that there was a take-up of 341,164 sq ft – almost the combined total take-up of the previous three quarters.
Alex Tross, head of office agency at LSH Birmingham, said the sector, buoyed with renewed confidence, enjoyed a 118% increase on the previous quarter alone. The 100,000 sq ft letting to HS2 at Two Snowhill was the year’s biggest transaction.
“This provided a fitting end to a year that saw quarter-on-quarter growth,” he said. “But even without the HS2 letting, the increase in take-up in the city centre was still 56% greater than Q3. This is a stellar performance.
“Thanks to an improving economic climate and Birmingham’s ever-growing reputation as a city in which to do business, we fully expect occupier demand to continue. In 2015 we will see the completion of a number of infrastructure projects in Birmingham, which will continue the upward trend.”
Analysis in the Q4 Office Market Pulse shows that 41 deals were transacted in the final three months of 2014, down just three from Q3. The average deal size was 8,300 sq ft, which was more than double that of the previous quarter and the long-term average.
Other major transactions include HSBC taking 37,530 sq ft of space at 120 Edmund Street and BDO agreeing a 13-year lease of 24,307 sq ft at Two Snowhill.
Alex said that the renewed confidence would also see developers more willing to look to building office space on a speculative basis, particularly because of the scarcity of Grade A space in the city centre.
That confidence is further evidenced by the recent launch of the Snow Hill Masterplan which will see over 2 million Sq Ft of new office space built in the city.
Investment in the UK commercial property sector totalled £20.5bn in the final quarter of 2014 – a 26% increase on the previous quarter and the highest quarterly performance on record.
The latest edition of LSH’s UK Investment Transactions report reveals that investment in the regions increased by 41% to £21.1bn for the year as a whole – the second highest figure on record.
This is the primarily the result of the resurgence of UK institutional investors – which increased inflows by almost 30% in 2014 – buoyed by improving economic sentiment beyond the capital.
In the West Midlands, total investment during 2014 soared to £2.31 billion – up from £1.59 billion in 2013 – an increase of about 44%.
