More than 1.6 million sq ft of additional office space is likely to be in demand in Birmingham over the next decade as office-based employment continues to rise regardless of Brexit, The British Council for Offices (BCO) has predicted.
In its ‘Brexit and its Potential Impact on Office Demand’ report the BCO identifies that by 2027 the second city will have to be able to accommodate an extra 1.67 million sq ft of office space as job opportunities increase.
According to the BCO, the demand for office space is set to increase in Birmingham driven by 8% rise in office economy jobs over the period to 2027. According to the report, the post-Brexit trend indicates that the stronger cities will continue to prosper, while the weaker cities only grow ever weaker.
Rob Groves, of property developer Argent and chairman of the BCO Midlands and East Anglia committee, said: “This is tremendous news for Birmingham and for towns and cities in the surrounding area, although there are choppy waters ahead in this uncertain time.
“The reports of substantial job losses immediately after Brexit were many and alarming, although they were largely based on the assumption of very negative Brexit negotiations, which is not a foregone conclusion.
“Even following a shock response the national and regional economy has shown resilience, clearly indicating that companies from across the world have continued to invest in Birmingham and the Midlands as a whole.”
The city’s two sectors that command the highest percentages of the office economy are the professional, scientific and technical sector (29.3%) and the administrative and support services (28.1%).
There are also a number of factors which will continue to influence Birmingham’s office market regardless of Brexit’s impact. Occupiers are constantly evolving, and so are their demands, with small and medium sized enterprises (SMEs) expected to influence the health of regional markets hugely. Cities, such as Birmingham, that can provide flexible space with good public transport, amenities and culture will continue to attract a diverse and dynamic occupier base of SMEs.
Many businesses have relocated jobs from London to other regional cities, as occupancy costs and salaries remain very high in the capital. Birmingham has emerged as one of the key locations and benefactors of this strategy, as well as a good standard of living without the costs of living that residing in London incurs.
The Government is also seeking to rationalise its estate across the country. It hopes to reduce its occupation of 800 buildings down to 200 by 2023, through its Government Property Unit programme, creating 22 multi-departmental hubs across the UK, . Birmingham as well as some of the other regional cities have all been identified as beneficiaries of this programme.
The report was compiled by Ramidus Consulting Limited on behalf of the BCO.
