The Birmingham office market saw among the strongest take up in the UK during 2015, according to the latest figures from national commercial property consultancy Lambert Smith Hampton (LSH).
The National Office Market Report 2016, which reviewed the office market across the UK in 2015 and looks ahead to 2016, found that take up in both Birmingham city centre and out-of-town regions rose significantly in 2015, far exceeding the 10-year average. The city centre saw 970,000 sq ft of deals, while there was 500,000 sq ft of take up out-of-town.
The city was also home to the largest deal outside the capital, HSBC’s 210,000 sq ft pre-let of 2 Arena Central, a relocation of its UK headquarters from Canary Wharf.
The outlook for 2016 is for a continuation of the impressive figures from 2015, with Q1 already proving the best ever for the city and additional notable requirements are now coming to the market.
Major deals in Q1 saw, PwC pre-let 90,000 sq ft at 1 Chamberlain Square, Paradise and utility business Xoserve taking 46,000 sq ft at Lansdowne Gate, Solihull.
In terms of supply, Birmingham leads the way across the Midlands, with 1.1 million sq ft of development underway, of which 0.8 million is speculative. However, only 347,000 sq ft of this is scheduled to complete in 2016, with the remainder from 2018.
Headline rents out-of-town increased by 9%, but are still below their historic high. Rental growth here and in the city is expected to continue through 2016, with Birmingham Business Park, Blythe Valley Business Park and Solihull town centre likely to set new record rents in 2016.
Commenting on the report’s findings, Alex Tross, Head of Office Agency Birmingham at LSH said: “2015 was another great year for the Birmingham office market, and 2016 has continued on in a similar vein.
“In the last 12 months the city’s offer has been enhanced by the Grand Central development and the Government’s continued commitment to HS2. Furthermore, deals like HSBC’s move to Arena Central are clear testament to the increased confidence of global players in Birmingham as a place to do businesses.”
Across the country, the report found a trend of occupiers moving away from London to better value cities elsewhere in the country, including Birmingham.
Tony Fisher, national head of office agency at Lambert Smith Hampton, said: “The significant cost advantages offered by the UK’s core regional cities are such that we are starting to see a rebalancing of business activity away from London over the coming decade.”
