It has been a strong start to the year for business parks and out-of-town office locations along the M42 corridor according to research by GVA, the UK’s largest independent commercial property consultant and the Midlands’ leading national property advisor.
Between January and March 2013, deals totalling 94,827 sq ft were completed at a number of sites including the popular Birmingham Business Park and Blythe Valley Park sites, with over 25 per cent of these transactions completed by GVA’s Midlands office.
Of the 18 deals that contributed to the quarterly total, only three were requirements for 10,000 sq ft or above.
Adrian Griffith, Associate, GVA, said: “This is a strong start to the year and I feel that we can continue to remain optimistic for the next two quarters, as there are a number of enquiries in the pipeline focussing specifically on requirements of between 10,000 and 20,000 sq ft, driven by the lease expiries for a number of larger occupiers.
“Longstanding tenants who have reached the end of 20 or 25 year leases will now be potentially looking to relocate and take advantage of market incentives while they continue to favour the tenant, which also provides greater flexibility. As occupier workspace requirements have changed, they now may need less space and are keen to find shorter or flexible terms.
“While there will always be churn in locations of under 5,000 sq ft, availability of accommodation over 10,000 sq ft will suffer a lack of churn, meaning that while demand remains high there will be insufficient supply, leading to supply beginning to dry up in the next 18 to 24 months.
“This will have the knock-on effect of reducing the flexibility of deals offered by landlords, putting them in a stronger position that they will have enjoyed for almost five years.”
While the figures appear to be down on the same period 12 months ago – which recorded 144,000 sq ft of transactions – the previous was bolstered by a single letting of 66,000 sq ft to Virgin Media.
Adrian said: “Historically there have always been two or three larger requirements each year that swell the take up figures, therefore the first quarter of 2013 figures look strong and should lead to a good total for the year.”.
GVA has also recorded a shift in the location of occupier enquiries, with many prospective occupiers now seeking locations within the traditional M42 core, around Junctions 4 and 6 of the motorway, with only 27 per cent of deals completed outside of this core area. This is in stark contrast to previous years, when demand was focussed on peripheral locations such as Bromsgrove and Redditch.
