Quality refurbished space is likely to dominate Birmingham city centre office take-up for the next few years.
CBRE’s newly published Refurbish to Reinvent report points to a lack of new Grade A stock in the city, leaving a number of extensively refurbished, large-scale office schemes in key locations to mop up demand.
Birmingham has not delivered a new Grade A office development in the city since Two Snowhill in 2013, and whilst there are a number of new schemes in the pipeline, nothing currently on site is set to complete before 2018.
The shortfall is being filled by high quality refurbishment including IM Properties’ 55 Colmore Row, Bruntwood’s Cornerblock, at the junction of Cornwall Street and Livery Street, and Legal & General’s Lewis Building.
According to Ashley Hancox, the Birmingham-based head of CBRE’s national office agency team and co-author of the report, along with the global real estate adviser’s research team, the owners of these buildings are not just giving them a facelift, they are undergoing significant remodeling.
He said: “These buildings are being revitalised to such an extent that is false to think of them as offering secondhand space, but rather as great buildings in prime locations that have been effectively reinvented.”
55 Colmore Row comprises 160,000 sq ft of high quality office space behind a classical façade on Birmingham’s premier business street. Law firm Pinsent Masons has already taken a 40,000 sq ft pre-let at the scheme, where an additional floor has been added.
Bruntwood’s Cornerblock will bring 110,000 sq ft of high grade space to the former Two Cornwall Street building in an extensive refurbishment that has gone back to frame. A rooftop garden will be among the new features.
Legal & General’s Lewis Building in Bull Street will provide ecologically friendly features and will add a seventh storey with an external terrace to the former department store. 114,000 sq ft of Grade A space will be ready to occupy from May next year.
The Platform 21 building, which is due to complete in the middle of next year, has flipped its entrance from New Street to Stephenson Street to make the most of its location opposite the re-born New Street station.
CBRE’s research also found that much of the new supply being delivered is targeted at larger businesses, with average floor plate sizes ranging from 15,000 sq ft – 26,000 sq ft.
Ashley said: “The ranks of smaller businesses are swelling in the UK and their appetite for higher quality, well located, aspirational office space, is increasing with it. It is refurbished stock that is addressing these requirements.”
Examples include Nurton Developments’ extensive modernisation of No.4 Temple Row, on the corner of Temple Row and Bull Street, where floor plates average 4,500 sq ft.
Nurton has led the field in refurbished city centre space, investing more than £10million at Two Colmore Square on Priory Queensway and the adjoining Cannon House.
Ashley said: “These are widely regarded as the blueprint for success, attracting high profile tenants such as Shoosmiths and VAX, paying premium rents.”
Smaller businesses seeking quality office accommodation in the city centre are also being targeted by TCN in Newhall Street, where 30,000 sq ft of offices have been created in its refurbished Grade ll-listed former Assay Office building.
CBRE’s Refurbish to Reinvent report reveals that there is a potential shortfall of suitable high quality office space across the core UK regional cities.
With this in mind, Ashley is clear that the quality refurbishment trend is set to continue.
He said: “From an occupier perspective, choosing a refurbished office may well be the most pragmatic, savvy, cost effective option, particularly if existing office space is centrally located – which it invariably is – and possibly benefiting from an attractive car parking ratio, something which is less common in new build stock.
“With the supply pinchpoint highlighted in our research, we anticipate that refurbishment of existing stock to a modern Grade A standards will become an increasingly favoured option, both to landlords and occupiers.”
