Confidence was buoyant in Birmingham’s SME community in the first quarter of 2020, according to analysis of the latest office market data by commercial property agents KWB.
Malcolm Jones, KWB’s head of office agency, points out that all-but three of the 16 transactions completed in the central Birmingham market went to small and medium-sized occupiers:
“It’s a unusually high percentage, suggesting that confidence had returned to that sector which, in normal circumstances, would certainly have boded well for the rest of the year,” he says.
“It’s also interesting to note that almost half of the deals were outside the traditional core market with five transactions in Edgbaston, including the second largest of the quarter, which saw Somerville House Ltd take 19.881 sq ft at 49 Calthorpe Road.”
The headline data saw take-up in the central Birmingham office market soar to a record Q1 high of 338,985 sq ft, driven by the completion of Ballymore and M&G Real Estate’s letting of 283,073 sq ft to BT at Three Snowhill.
“It was an exceptional deal, it really lifted everyone in the city’s property market, but it has very swiftly become almost a historic footnote,” admits Jones.
“No-one knows what the ‘new normal’ will be when the COVID-19 virus is finally eradicated, and everyone returns to work, but a deal of that scale will be a record for a long time to come.
“At least too, there is some consolation that SMEs were identifying and taking space, suggesting they were in sound financial health before the impact of the virus, and the data also indicated a strong pipeline of proposed transactions which may still take place later in 2020.”
However, Jones believes that if the current lockdown lasts for several months, it will cause some companies to re-evaluate their previous business models.
“I suspect that once the teething problems about remote working have been overcome, and the new models have worked successfully for a reasonable period, that there’ll be a greater appetite for such arrangements to continue, by both employers and individuals, especially in the professional services sector,” he suggests.
“I wouldn’t be surprised to see occupiers looking to restructure the way their offices operate, perhaps via a greater use of ‘hot desking’ and certainly via a greater desire to allow some staff to work from home.
“In these fast-changing times, it’s clearly impossible to be certain about anything, but I would expect to see new and innovative approaches to the use of office space coming forward in the post-lockdown months.”