Birmingham’s office market is poised to enjoy another bumper 12 months following a record-breaking 2017, according to national property consultancy Lambert Smith Hampton (LSH).
In its latest Office Market Pulse for Birmingham, LSH says an exceptional second half of the year – which included a record-breaking Q4 – boosted the region’s office market, taking transactions over the one million square feet mark for the first time.
Alex Tross, head of office advisory at LSH Birmingham, said that balance of supply and demand is very good in the region and that all the ingredients are in place to enjoy continued success.
With a number of serviced office providers taking more space in the city over the past few months, Alex says that it is likely that more co-working companies will take a significant amount of space this year.
“While a number of existing serviced occupiers have increased their holdings, there are still some big names that have yet to enter our market. Given the success of 2017, I have no doubt they’ll be looking very closely at Birmingham,” he added.
The success of the office sector in Q4 success followed a muted H1 2017, explained Alex.
“It really was a year of two halves for the Birmingham office market,” he said. “Against a long-term annual average take-up of 700,000 sq ft, the first half of the year could only muster a relatively tepid 248,500 sq ft.”
Q3 saw take up of 402,000 sq ft, including the GPU pre-let at Arena Central, which at 239,000 sq ft, was almost the same as the whole of H1.
That trend continued and resulted in the most successful Q4 in the city’s history, he added. Notable deals included Regus taking 110,000 sq ft across both Crossway and The Lewis Building, PwC increasing its Paradise holding by 60,000 sq ft, and the RICS taking 31,000 sq ft at 55 Colmore Row.
The remarkable second-half performance propelled the city to a record year of take-up, ending at 1,005,072 sq ft transacted.
Alex said: “We have seen some very large deals – in spite of the blip we had last year, which was associated with Brexit, the city is still doing really well.
“The south east is becoming ever more expensive following the rates revaluation, so for occupiers looking for a proven destination Birmingham is now the obvious choice.
“With everything we have done to improve our infrastructure, and further improvements on the horizon, this year will see the city continue to do extremely well. The balance of supply and demand is very good and we have all the ingredients in place to enjoy continued success.”
The office sector is likely to see a number of significant deals, including the possible start of construction at 103 Colmore Row, while M&G will be pleased by the city’s performance last year as it is speculatively building 420,000 sq ft at 3 Snowhill, added Alex.