Transactions on commercial offices totalling more than 300,000 sq ft along the M42 corridor have taken place in the first half of 2015, according to the office team at property adviser, Bilfinger GVA.
The figures reflect a solid improvement over the same period in 2014 when just under 200,000 sq ft of deals were completed.
The second quarter was particularly strong, accounting for 277,125 sq ft of the total, an increase of 91% against Q2 2014.
The activity includes a combination of lettings in both traditional out-of-town office parks and town centre locations, including Kings Court, Bishops Court and The Crescent on Birmingham Business Park and Cranmore Drive at Junction 4 of the M42.
Several lettings were in excess of 10,000 sq ft, including the Bank of Ireland’s letting at Friars Gate in Solihull, Convergence Group’s letting at Cranmore Drive, and Solihull MBC’s letting at The Green, all of which Bilfinger GVA acted on.
On top of this were the lettings at Birmingham Business Park to Changan Automotive and Ryder Trucks for 24,843 sq ft and 16,668 sq ft respectively.
The most significant contribution to Q2 was Interserve’s acquisition of the freehold at International House in Solihull, close to Birmingham Airport. Interserve intends to use the site to develop a new Headquarters facility, including 145,000 sq ft of offices.
Adrian Griffith, Director, Bilfinger GVA, said: “These are the highest levels of activity that we’ve seen for some time and are a continuing improvement on the figures that were returned for the same period in 2014. The great story here is that activity in both Birmingham city centre – which saw over 645,000 sq ft of transactions – and the out of town market has seen a tremendous first half of the year.
“This is the first time for a while that these quarterly figures don’t include a raft of lettings in peripheral locations such as Redditch or Bromsgrove, but are instead focused on the core of M42 corridor market, particularly between Junctions 4 and 6.”
With no speculative out-of-town commercial development currently taking place, availability of high quality office stock is continuing to fall. This is in turn forcing occupiers to find alternative ways of satisfying their requirements.
Adrian Griffith continued: “While good quality stock continues to diminish, we are seeing some occupiers considering either purchasing sites to develop by improving their densities, or refurbishing existing offices, some of which are over 20 years old, by stripping back the building to shell and core then providing a modern Grade A specification.
“This is exactly what we’re currently seeing with Interserve’s acquisition of International House in Solihull, and with some landlords at Birmingham Business Park in the refurbishment of first generation offices.
“While there are disadvantages in terms of the timescales required to secure new premises in this manner, this is however helping to refresh the levels of stock that are available around the M42 corridor and breathing life back into 25 year old stock, whilst securing good long-term income for landlords.”