Global workspace provider WeWork dominated the Birmingham city centre office market in Q2, where total transactions exceeded over 320,000 sq ft and a new record headline rent was achieved.
Avison Young’s quarterly Big Nine report, which assesses activity in city centre and out-of-town markets in the UK’s nine largest regional cities, showed that between April and July Birmingham saw transactions totaling 320,595 sq ft, a 68 per cent increase on the ten year quarterly average.
WeWork secured the largest quantum of space in that period, totaling 229,000 sq ft across three buildings, including the largest deal in the city this year at 6 Brindleyplace, where it has acquired 92,670 sq ft.
The flexible working specialist also leased 81,000 sq ft at Louisa Ryland House and a further 55,000 sq ft at 55 Colmore Row, which also set a new record headline rent of £34 per sq ft.
To date, 515,000 sq ft has been transacted in Birmingham this year, and Avison Young expects take-up in the city centre to exceed 900,000 sq ft by the end of 2019.
Charles Toogood, Avison Young, said: “WeWork has been a major new entrant to the market in Birmingham this year and the amount of space they have already snapped up proves that the city continues to be popular with the flexible space and co-working sector.
“Record low availability of Grade A space combined with strong occupational demand across varying sectors is anticipated to result in further growth in headline rents.”
The limited Grade A availability, which currently sits at 157,000 sq ft, is set to be boosted by the completion of Snowhill, which will provide 380,000 sq ft, and 2 Chamberlain Square, which will offer a further 167,000 sq ft.
Charles Toogood continued: “While there is a substantial pipeline of development, much of this, especially at the top end, is already pre-let, meaning there is less choice of stock for prospective occupiers, until new development comes on stream.
“Undoubtedly there is great opportunity for investors and developers alike to provide both new Grade A and high quality refurbishment space to ease the impending stock shortages, whilst capitalising upon Birmingham’s positive momentum and growth prospects.”
