HS2 & Government requirements could drive Birmingham office take up to 750,000 sq ft in 2017 - Savills

28 March 2017

Birmingham city centre office take up could reach 750,000 sq ft in 2017, according to Savills latest Spotlight: Birmingham Offices report, marking a 19% rise on the 2016 total of 670,000 sq ft. This will be driven by strong demand from engineering firms and consultants following HS2’s Royal Assent and a HMRC requirement for circa 250,000 sq ft, says the firm.

The report also notes that the traditional defined boundaries of the central office district are evolving outwards thanks to a combination of improved infrastructure, such as the £600 million Grand Central redevelopment, and major commercial developments coming forward.  Due to a lack of supply, prime city centre rents have risen to £32.50 per sq ft.

Major redevelopments including 55 Colmore Row (160,000 sq ft), Cornerblock (114,000 sq ft) and the Lewis Building (112,000 sq ft), all completing in 2017, will help to bolster supply until 2019 when Three Snowhill and Paradise will deliver a combined 765,000 sq ft of new Grade A office space, says Savills.

The firm highlights Solihull and the M42 Corridor as the West Midlands’ key out of town office market and expects take up to continue picking up pace after a buoyant 2016.   Recent deals included PKF’s 19,000 sq ft acquisition at Blythe Valley Park and National Grid acquiring 46,000 sq ft Lansdowne Gate in Solihull town centre.  As a result, prime Solihull rents have already grown 16% to £23.50 per sq ft and Savills anticipates a positive tone moving forwards.

Ben Thacker, office agency director at Savills Birmingham, comments: “The current strength of the M42 office market has largely been boosted by the ever improving wider Midlands economy, but also driven by the evolution of business parks, which are now providing a far more diverse offer for occupiers.  IM Properties’ Blythe Valley Park is a prime example of the future business park model, combining commercial, residential, retail and leisure amenities to ensure a vibrant 24/7 sustainable environment.”

Clare Bailey, associate director in the commercial research team at Savills, adds: “The Solihull and the M42 Corridor office markets have grown in tandem with Birmingham city centre, meaning the West Midlands has a truly comprehensive offer.  As HS2 connects the airport, the M42 and city centre, this new infrastructure will see certain sectors become less concrete in their traditional location preferences.”

To read the full report, click here.

 
 

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Key Contacts

Ben Thacker

Ben Thacker

Director
Agency (Office)

+44 (0) 121 200 4561

 

Clare Bailey

Clare Bailey

Associate Director
Commercial Research

Savills Margaret Street

+44 (0) 20 7409 8863