Birmingham is the world’s 37th most expensive city in which to rent an office, according to CBRE’s latest global ‘Prime Office Occupancy Costs’ survey.
According to the research, which ranks the 50 top priced prime office locations, the average cost – including rent, business rates and service charge – of occupying a Grade A office in Birmingham is now £46 per sq ft.
The city has moved two places up the rankings, from 39th position at the end of 2014. This time costs in the city have increased by 5.3 per cent over the last 12 months.
The survey’s top spot continues to be claimed by London’s West End, where renting an office will set a business back almost £180 per sq ft.
Manchester is the UK regions’ most expensive office market, at £48.50 per sq ft, earning the northern city 34th place in the CBRE table. Edinburgh, at £47 per sq ft, is ranked 35th.
The UK has more office centres on the list than any other country. Aberdeen and Glasgow (£45 per sq ft/38th = ), Bristol (£44.50 per sq ft/41st), Leeds (£43 per sq ft/44th) and Jersey (£39 per sq ft/50th) also make the top 50.
However, Asian locations, including Hong Kong, Beijing and Tokyo, dominate the top ten.
Rents across the UK are also moving north, with ten offices centres, including Birmingham, showing in the top 50 for the largest annual increase in occupancy costs.
Birmingham is 25th on the list of global high climbers, with a rise of 5.3 per cent in occupancy costs over the last year. Costs in Manchester climbed 7.8 per cent, placing it 15th on the list. Belfast saw the highest hike in rents in the UK, at 13.3 per cent, but despite this rise, with occupancy costs of just £25.50 per sq ft, it was outside the top 50 most expensive list.
According to Ashley Hancox, executive director in CBRE’s national offices team, out of Birmingham’s £46 per sq ft occupancy costs, £30 is attributable to rent.
He said: “Prime office rents in Birmingham have yet to reach their pre-recession high water mark of £33 per sq ft. However, I fully anticipate that the next material pre-let in the city will add ten per cent to rental costs.
“This is as much to do with rising construction costs as it is to do with market conditions and stock shortages. Rents now need to be £30 plus for developments to stack up.”
Mr Hancox believes Birmingham’s cachet as an office location is also on the rise.
He said: “The lettings to HS2 and HSBC have shone the spotlight on the city’s office market, while the airport extension and imminent opening of Grand Central and the Metro extension beef up our connectivity and attractiveness to businesses.”
