Advancements in sectors such as manufacturing, financial services and technology will provide a huge fillip for Birmingham’s office market.
That’s the confident prediction from global property consultancy Knight Frank, which has an office in the city.
In the firm’s newly released Birmingham Report, its chief economist James Roberts has identified five sector trends which he believes will benefit the city and specifically its office market.
They are: second wave technology demand; re-shoring manufacturing; ‘Mexican wave’ service centres; robotics, drones and autonomous cars and fintech (financial technology).
Roberts suggests changes brought about by the ‘digital revolution’ will see new industries emerging in the coming years, generating additional sources of demand for office space.
And he believes Birmingham is well-placed to capitalise on the trends he identifies.
Knight Frank predicts that second wave technology demand – which in the US saw the spreading out of technology businesses from first wave centres such as San Francisco and New York to other regional centres – is likely to be replicated in the UK. And Birmingham, with its large universities and extensive rail connections – is the logical second wave location for demand spreading out of London.
Meanwhile, smart manufacturing solutions, involving the use of robot-led factories, will lessen the need for re-location to low-cost overseas production centres and lead to re-shoring back to the UK, according to Knight Frank. Desk-based staff will oversee such facilities with Birmingham, which, at the heart of advanced manufacturing, is the obvious destination for this activity.
Advancements in areas such as robotics, drones and autonomous cars will also play to the city’s strengths in advanced engineering. Knight Frank envisages increased demand for Birmingham office space as a result as increasingly research and development work for these activities is carried out on computers.
Mr Roberts believes the city’s office market will also benefit from a growing trend within the legal sector whereby London-based law firms win business and then ‘sub-contract’ it to junior lawyers in regional offices. The trend is likely to be replicated in a number of other service industries. With its large professional services and financial services base, Birmingham is likely to be a main beneficiary of this ‘Mexican wave’ activity.
And finally, Roberts suggests that just as London’s Shoreditch area has become a hub for fintech (financial technology) activity for wholesale markets trading, Birmingham – which, with the relocation of HSBC is now emerging as a key centre for UK retail banking – has a great opportunity to position itself as a retail fintech centre.
Ashley Hudson, head of Knight Frank’s Birmingham office, said: “Clearly the trends identified in this report mean that we are going to be living in exciting economic times.
“There is sometimes a tendency to be scared of the ‘shock of the new’ but Birmingham has nothing to be frightened of. With the region leading the charge in sectors such as advanced manufacturing, technology and professional and financial services, our offering perfectly matches the requirements of the businesses of the future.
“And with so many of the resulting jobs likely to be ‘white collar’, the city’s office market is likely to be the obvious beneficiary of the growth resulting from the trends identified in this report.
“There is no reason why the city can’t be every bit as successful in the digital age as it was in the industrial revolution.”
