Take-up of office space across the ‘Big Nine’ cities during the first quarter of 2017 was at its lowest level for five years, however enquiries and business confidence remain high in Birmingham.
This is the key finding from the latest edition of the quarterly Big Nine report, published by real estate adviser GVA.
Transactional activity within Birmingham city centre came in 45,000 sq ft short of the five year average, totalling 136,203 sq ft. This is a reflection of the overall national picture, with take-up across all nine key regional cities coming in at 998,000 sq ft, 23% down on the five year quarterly average.
The most significant city centre letting of the period was the 20,000 sq ft secured by construction company Arcadis at Bruntwood’s Cornerblock which is currently undergoing a significant refurbishment.
The picture in the out of town market was more positive. While take-up was 11,919 sq ft short of the five year quarterly average, business park and out of town rents led the other cities at £22 per sq ft.
Charles Toogood, Senior Director in GVA’s office agency team, said: “We can always expect the first quarter of any year to be slower due to the annual rush at the end of the preceding year to get deals across the line before the Christmas break.
“There has, of course, been added uncertainty in the market this year from Brexit, the snap General Election and the election of the region’s first Metro Mayor but the appointment of Andy Street has helped to assuage some of this nervousness.
“To my mind, the first quarter of this year has been a question of quality over quantity, with the letting to Arcadis at Cornerblock being of particular significance as a first letting and anchor tenant for the building and that it was secured before the conclusion of the refurbishment works. This also shows a great confidence from the construction sector.
“We are also anticipating a rise in activity across the rest of the year, with a number of transactions either concluded or currently in solicitors’ hands.”
Birmingham has also seen a significant upswing in the availability of serviced offices, with iHub taking 18,000 sq ft at Colmore Gate and Alpha Works committing to 14,000 sq ft at Alpha Tower.
Charles Toogood continued: “The rise in take-up of space for serviced offices will continue to play an important part in the development of Birmingham’s commercial landscape, with some 100,000 sq ft of short-term contracts expected from HS2-related suppliers following the granting of Royal Asset for the first phase of the line earlier this year.”