Grade A office take up in Birmingham fell by more than any of the country’s top ten regional cities* in the third quarter of this year.
According to Knight Frank’s latest ‘Regional Offices Market Report’, the city saw an 82 per cent drop in total space let compared to Q2, transacting just 90,779 sq ft between July-September this year. Manchester topped the table with 379,976 sq ft of deals done in Q3.
Jamie Phillips, a partner and head of the office team at the Birmingham office of Knight Frank, said that while the statistics are disappointing, they are a blip rather than a trend.
“It’s important to put these figures into context. The city put in a stellar performance in Q2, when more than 520,000 sq ft of transactions were completed, higher than any other regional city.
“What’s more, 741,318 sq ft, take-up in 2015 to date has already outstripped 2014’s 713,460 sq ft. There is no need for panic,” he added.
Mr Phillips is also encouraged by the level of enquiries in the city. Occupiers are currently seeking 945,000 sq ft of Grade A space in Birmingham, more than any other regional city. Across the ten regional cities 4.5m sq ft of active requirements were recorded in Q3, with a fifth of the total focused on Birmingham.
He said: “This level of enquiries obviously raises hopes of a strong finish to 2015. But however the stats pan out for this year we have a strong pipeline going into 2016.”
While the occupier market in the city was subdued in Q3, the investment market was firing on all cylinders.
According to the Knight Frank report, total turnover in the regional investment market for the year to date is £3.1bn, the highest since 2007. Investment volumes in the regions in Q3 reached £1.05bn, with Birmingham and Manchester accounting for nearly half of that.
Birmingham saw £315.2m deals complete, including the sales of Colmore Plaza and 1 Colmore Square, while Manchester transacted £204m.
Ashley Hudson, head of investment at Knight Frank in Birmingham, said: “Investor appetite for regional office stock is continuing. Birmingham has been in the national spotlight recently, what with the delivery of Grand Central and New Street Station; it is important that we continue to press home the attractions of the city to ensure we remain top of investors’ shopping lists.
*Aberdeen, Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Manchester, Newcastle, Sheffield.