The demands of HS2 contractors for flexible office space continue to have a positive and potentially long term transformational effect on the Birmingham office market in a quarter dominated by the largest pre-let for more than 10 years, according to Birmingham-based independent commercial property agency KWB.
Writing in KWB’s Birmingham City Centre Office Market Research – Quarter 3 2017 Report, Mark Robinson, Director in KWB’s Office Agency Team, says companies awarded HS2 contracts taking flexible space was a key factor in Birmingham office lettings in the third quarter of 2017.
Mr Robinson says: “Birmingham office lettings news was dominated by HMRC‘s landmark transaction at 3 Arena Central of 238,988 sq ft, which will account for nearly one third of the total space transacted in the whole of 2017, but half the deals in the 10,000-25,000 sq ft bracket were for flexible office space.”
Of the six deals between 10,000 and 25,000 sq in Q3, three were completed by managed office specialist Instant Offices which took traditional 10 year leases on space in Cornerblock and 19 Cornwall Street and then let this space as a managed office on flexible terms to HS2 contractors Laing O’Rourke/Murphy, Fusion and Kier.
Added to the space they took at Gateway House on behalf of Capita in Q2, Instant Offices’ procurements account for almost 50,000 sq ft (circa 8%) of the total office space transacted in the Birmingham office market so far this year.
Mr Robinson continues: “With HS2 contractors in particular, and office occupiers in general, looking for more flexibility in uncertain times, we could see Instant Offices begin to do for typical Birmingham city centre occupiers what they have done for HS2 contractors.
“Landlords who are prepared to be more flexible on their leasing terms will continue to do well, as Cornerblock has with its lettings to Arcadis, Beazley Insurance and Instant Offices, and Alpha with lettings of more than 11,000 sq ft to Allegis and Malcolm Hollis.”
