Freehold acquisitions made a noticeable return to the M42 and Solihull office market in the third quarter of 2017 which was dominated by the largest letting for two years, according to Birmingham-based independent commercial property agency KWB.
Local sports clothing company Gymshark delivered the largest letting of 42,408 sq ft on Blythe Valley Business Park, which was over half the total space transacted in the quarter. However, Birmingham Business Park secured the quarter’s second, third and fourth largest transactions, two of which were freehold acquisitions.
Construction firm John Sisk & Sons, a longstanding occupier on Birmingham Business Park, acquired the freehold of 8,826 sq ft of offices at 2410 Regents Court, while management consultants, Capp & Co purchased 8,154 sq ft of office space at 2230/2235 Regents Court, setting in motion its relocation from Coventry’s The Venture Centre.
Writing in KWB’s M42 And Solihull Office Market Research – Quarter 3 2017 Report, Mark Robinson, Director in KWB’s Office Agency Team, says rising freehold prices, on the back of an increasing lack of supply, have encouraged more investors to consider selling office buildings.
He says: “There has been a significant increase in the past 18 months of freehold office sales in the market, but this has really come to the fore in the last quarter. So far this year 46,305 sq ft of freehold space has been transacted across 10 deals.
“Birmingham Business Park remains a ‘go to’ location for the market. Unfortunately it did not have the ready availability of a 40,000+ sq ft office property to offer to Gymshark. But, with three of the top four deals of the quarter, and a building of 30,000 sq ft about to come to market, Birmingham Business Park seems set to continue to lead the way.”
According to Mr Robinson, lack of supply continues to be an issue, as demand remains high, with only a handful of HQ buildings currently available in the market, such as 31 Homer Road in Solihull town centre, 2100 The Crescent and 2940 Trident Court at Birmingham Business Park and One Central Boulevard at Blythe Valley Park.
He says: “Organisations continue to be drawn to the excellent transport links and connectivity in the shape of Birmingham Airport, Birmingham International train station and the M42. Those that are based there already want to stay and expand there.”
The total amount of space transacted in the Solihull office market in the year to date stands at 218,462 sq ft. If the market achieves in Q4, the average of the first three quarters, it will fall just short of the long-term yearly average of c. 305,000 sq ft.