Birmingham’s office market saw transactions totalling over 1.2 million sq ft of space in 2018, a nine per cent increase on the previous ten year average, according to new data released by Avison Young.
Its quarterly Big Nine report (formerly compiled by GVA), which analyses market activity in the nine largest regional cities in the UK, shows Birmingham’s city centre and out-of-town markets saw a strong Q4, with combined take up totalling over 423,000 sq ft.
This included Birmingham City University’s acquisition of the 118,240 sq ft Belmont Works in the Eastside area, the largest city centre deal in Q4 of any of the nine cities featured in the report. Zurich Insurance also completed a deal to move to 23,300 sq ft at the Colmore Building, while there was healthy inward investment from Freightliner, which acquired 16,000 sq ft at The Lewis Building.
The final quarter of the year also provided the out-of-town market with its highest level of activity for three years, boosted by financial advisers Barnett Waddingham taking 21,123 sq ft at 3 Devon Way in Longbridge.
A selection of deals were also completed at Birmingham Business Park, including train manufacturer Zhuzhou signing up for 17,600 sq ft and dental technologists Align Technology’s letting of 13,300 sq ft.
Charles Toogood, Avison Young, said: “Birmingham experienced a very strong Q4 both in the city centre and out-of-town markets, and it shows the confidence in the region from local businesses and those looking to relocate as inward investors, and the wide variety of space in terms of both size and location currently available in the region.
“Out of town locations such as Solihull are seeing some of the highest headline rents in the UK regions, which demonstrates businesses desire to locate to the West Midlands, not just in the cities, but further afield as well.
“We’ve seen organisations from varying sectors make moves to new property this year, including those from central government, specialists in financial services and those offering co-working and serviced office space. This depth of sector interest is yet another sign of a healthy market conditions, and bodes well for the continued strength of the market in the region.”
The limited availability of grade A space in the city is set to be addressed in 2019 as 577,000 sq ft of speculative development set to complete, including 167,000 sq ft at Chamberlain Square and 410,000 sq ft at Three Snowhill, the largest speculative development in any of the Big Nine cities.
Charles continued: “The lack of availability of grade A office space within the city centre has been an increasing issue in recent months, but these large scale developments will be of significant benefit to the supply pipeline and the city’s ability to attract large scale inward investors.
“The speculative development also portrays a clear vote of confidence in the regional market, with developers expecting strong demand for sizeable, high-quality space within the city.”
Avison Young’s Big Nine report is produced quarterly and analyses office market data in the UK’s nine largest regional cities; Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, Manchester and Newcastle.