If rising costs in the capital means London is off limits, then where’s the right place to base your logistics operations? Many experts believe Birmingham is a brilliant bet. Here Richard James-Moore, Director of JLL’s Industrial and Logistics division in the city, shares his insights:
What does Birmingham have to offer small businesses?
Birmingham is a great location for small businesses. With a population of more than 1.1 million people, it’s the UK’s second-biggest urban area after London – and it’s considerably more affordable when it comes to renting or buying logistics space.
What kind of businesses are choosing Birmingham?
Many of the businesses seeking mid box (urban logisitics) spaces in Birmingham are in e-commerce. They need access to the city centre for last-mile deliveries as online shopping continues to soar in popularity. It’s a major trend across the UK and as a large, busy city, Birmingham is no exception.
Manufacturers that make parts for the automotive and aerospace sector are also coming to Birmingham in droves, servicing the supply chain for firms such as Jaguar Land Rover, which has a major base nearby.
Should I rent or buy in Birmingham?
Both options are in demand but at the moment, we have considerably more rental units coming on to the market in Birmingham than units for sale.
If you’re looking to rent a property you’ll have a lot more options than buying – and it gives far more flexibility if you plan to scale your business up over time. That said, of course there are benefits to buying a property, if your budget allows it. Commercial property can prove to be a very good investment, providing financial security in later life.
What are some of Birmingham’s most popular locations?
In the city centre, preferred locations depend very much on individual companies’ needs. In recent years, we’ve seen an influx of technology and media businesses setting up in Digbeth in the east end of Birmingham. Prime locations in Birmingham follow the M42 corridor from Redditch(J3), round to Solihull (J4), the airport (J6) and onto Hams Hall (J9) and Tamworth / Birch Coppice (J10). All of these areas have good demand. The advanced manufacturing hub in Aston has seen a surge in manufacturing occupiers given the area is dedicated to this use due to planning restraints.
How are the transport links?
Birmingham is incredibly well connected. We’ve got HS2, the new high-speed rail connection coming soon, which will cut journey times to the capital to just 49 minutes. Rail links are already very good, and there’s a great network of motorways as well as Birmingham Airport.
What’s the workforce like in Birmingham? Will I find it easy to recruit as my business grows?
As a large city, Birmingham has a large labour supply and with several universities in the city, there’s an abundance of skilled people. It’s a city that’s most definitely open for business.
What kind of prices might I expect to see for industrial space there?
That varies depending on factors such as proximity to the city centre, fixtures and fittings, the amenities available and the age and condition of the building.
Based on recent contracts, we’re seeing starting prices of around £6-7 per square foot for good quality pre-used small units up to 10,000 square foot in size. For new builds, that rises from around £8 per square foot up to £10 per square foot for prominent roadside locations.
To buy, prices are more like £90 per square foot for existing buildings, and £125 per square foot for something brand new.
Three ways to get the most from your business space
1. Consider the lease length and whether it’s right for your business. If the landlord of your dream property insists on 10 years but if you plan to grow your business significantly in five, keep looking or ask for a break clause.
2. Have a very close look at the building. As a tenant, you’re responsible for returning it in the same condition at the end of your lease. It’s always worth investing in having a surveyor carry out a schedule of condition at the outset. It could save you thousands in repair liability bills.
3. Entrepreneurs often try to do everything by themselves, even if property negotiations are far from their area of expertise. It’s usually worth seeking professional advice to negotiate the best terms for your business.
