Pent up demand for courtyard offices across the West Midlands is pushing up prices, making it worthwhile for developers to start building again, according to a leading office property agent.
Malcolm Jones, a senior member of the office agency team at Birmingham independent commercial property agency KWB, says that demand for offices in courtyard schemes, particularly freeholds, far outstrips availability, with prices having increased by some 20% in the past two years across a range of developments.
“Our recent and pending sales at courtyard developments in Redditch, Bromsgrove, Solihull, Stratford-upon-Avon, Hockley Heath and Droitwich have all been hotly contested, primarily by business owners wanting to acquire their own premises,” says Mr Jones.
“We could have sold some of these second hand units three or four times over, but stock is limited, as development of these small attractive business schemes generally stopped after 2007.
“With new build units capable of commanding in excess of £200 psf for freehold sales, there is a real opportunity for landowners and developers to look at building courtyard schemes once again.”
Having acted as agent for well in excess of 20 courtyard schemes at KWB, Mr Jones says it is offices between 1,500 sq ft and 3,500 sq ft that are most highly sought after.
He says: “Most business owners are looking to take advantage of acquiring their building through an individual or directors’ pension fund, via a Self-Invested Personal Pension (SIPP) scheme or a Small Self-Administered Scheme (SSAS). Taking into account the borrowing limits, offices of up to 3,500 sq ft are still generally affordable, especially as the banks are willing to lend and interest rates remain at an historic low.
“While freeholds are most desirable, courtyard office leases are also popular, as these developments are generally regarded as a very good business location. Offices are often self-contained with their own front door, and have car parking and easy access, all within a managed, landscaped environment.
“It’s a very good time for experienced developers to look at these again, and for landowners to consider a courtyard development. We would be very happy to lend our considerable experience to assist.”