The retreat of global serviced office operator WeWork will release almost 174,000 sq ft of office space back onto the Birmingham city centre office market, according to KWB’s director of office agency, Malcolm Jones.
He says the US-based group has retained one element of its original space (at 55 Colmore Row), cancelled a second lease at Louisa Ryland House, and is negotiating an exit from No 6 Brindleyplace.
“When WeWork came to Birmingham in 2019 it took 229,000 sq ft of office space on long-term leases, but when it has completed its restructuring, it will have only 55,000 sq ft,” said Malcolm.
“However, it’s reassuring that the landlords of Louisa Ryland House are still proceeding with their multi-million pound office refurbishment for its 86,000 sq ft.
“New tenant amenities, such as a roof terrace, external courtyard, showers, changing rooms and cycle storage will help make it a more sustainable and COVID-secure location.”
Malcolm was commenting after the release of the Birmingham city centre office take-up data for 2020, showing that annual lettings were down to 520,810 sq ft – just under three-quarters of the 10-year average.
“It wasn’t the lowest of the last decade, that was 2012, but equally, the total looks far more positive than it would otherwise have done thanks to the landmark letting of 283,000 sq ft to BT at Three Snowhill back in January 2020.
“However, it’s interesting that despite a great deal of chatter about remote working, there are no signs of occupiers trying to shake themselves loose of their office commitments.
“Working from home for at least some of the working week is clearly here to stay, but employers who occupy large chunks of office space in Birmingham city centre are unlikely to want to relinquish it, particularly those with an international presence who will take a considered and long-term view about occupation levels.”
Intriguingly, the data also reveals that fringe locations within the Birmingham city centre market proved resilient throughout 2020, with 13 transactions for just over 96,000 sq ft in Aston, Digbeth, Eastside, Edgbaston, the Jewellery Quarter (JQ) and the Chinese Quarter.
“If you take out the once-in-a-blue-moon BT letting, these fringe areas accounted for 40% of the remaining lettings, and the market is expecting the DWP (which took 48,000 sq ft in the JQ last year) to take more space in the same B1 building,” said Malcolm.
“There are also very positive signs from two major construction projects. Sterling Property Ventures gets ever closer to completing its 103 Colmore Row skyscraper, which will offer 230,000 sq ft of Grade ‘A’ office space, and the One Centenary Way phase of Paradise is due to complete in 2021, which will deliver another 280,000 sq ft.”