Smaller offices once again formed the majority of transactions in Birmingham city centre in 2018, showing that small businesses remain highly active in the city, and are still keen to sign traditional leases, rather than take serviced office accommodation.
Malcolm Jones, Head of Office Agency at Birmingham independent commercial property agency KWB, says that more than half (54%) of the reported office lettings and sales in 2018 were for 3,000sq ft or less (52% in 2017).
Mr Jones says: “Despite the massive boost in serviced office space in Birmingham city centre of 215,316 sq ft in 2018, following 200,000 sq ft in 2017, many smaller occupiers still want to have their own space with their own front door, rather than take space in a larger flexible office.
“For mature businesses which can more accurately predict their office space needs over a three to five year cycle, serviced office space can prove to be as much as double or possibly three times more expensive per square foot than traditional office space,” continues Mr Jones, writing in KWB’s 2018 Birmingham Office Market Annual Report.
“Offices on traditional leases can also provide the opportunity to brand the exterior, fit-out the interior to match corporate culture, and demonstrate a much more permanent presence to customers and staff alike.”
According to Mr Jones, Guildhall Buildings on Navigation Street has been particularly successful in letting small office suites in 2018, and is now 95% let.
He says: “Oval Real Estate recognised Guildhall Buildings’ key location, opposite the main entrance to New Street station, and carried out a high quality comprehensive refurbishment of the office space, resulting in a very attractive proposition for smaller occupiers.
“In 2019 it will still be possible for landlords to get a good return on capital investment in refurbishing office buildings with smaller suites and offering them on traditional three to five year leases.”