The central Birmingham office market is demonstrating remarkable resilience, achieving its highest figures at the three-quarters stage of a calendar year since 2015, according to a commercial property expert.
Twenty-three transactions have taken place in Q3 totalling 348,690 sq ft. This adds to the 48 deals comprising 368,794 sq ft in the first half of 2024, giving a total of 717,484 sq ft of transactions in 71 deals.
The total take-up at this three-quarter stage of the calendar year is the highest since 2015 when HSBC UK opened its HQ in Birmingham city centre.
Charles Warrack, Partner at leading property consultancy Fisher German based in Colmore Row, Birmingham, said the trends being shown in Q3 emphasise the importance of the education sector in the commercial office market.
He said there has been two stand-out transactions with Aston University taking nearly 190,000 sq ft of space at 10 Woodcock Street in addition to the Global Banking School taking just over 68,000 sq ft at 1 Brindleyplace.
“These two transactions are not only good news for central Birmingham, but highlight the resilience and popularity of the Aston and Brindleyplace areas of the city centre,” Charles said.
“When speaking regularly to occupiers, tenants and landlords, key trends are being crystallised within the marketplace and also new ones are emerging.
“The specification of office buildings continues to be very important. Features such as nearby coffee shops, on-site gyms, cycle and storage facilities, changing and showering facilities and tenant break-out areas continue to be very popular and almost pre-requisites for most occupiers so that they can both retain and recruit staff.
“I have also noticed that some occupiers are really focused on getting value for money, even more so than usual. This is not to say occupiers are looking for budget space but require offices which work on both a functional and financial point of view.
“I very much think this trend will continue alongside the more familiar flight to quality that has been witnessed in the last three or four years.
“I think there is a clear message to landlords that if you do have an underperforming office building, it is very important to consider what action should be taken to improve its accommodation and facilities.
“There is no doubt that when these are upgraded, the chances of a successful letting are greatly improved. This is quite clear from the evidence of the take-up figures that have been released for Q3.”
Charles said another continuing trend within the market is flex/serviced office space which boosts the start-up economy of the city centre.
He added: “I think the popularity of the serviced office market will continue to grow, and there are one or two new entrants to the market eyeing up accommodation at the moment which is a reflection of the strength and diversity of the office market.
“The serviced office market also very much supports the traditional office market as an entry-level way into the Birmingham market, simply due to the inherent flexibility it can give to occupiers and a chance for them to grow and flourish.
“There is still the final quarter to go and I think there will also be a strong finish to 2024.”
