Birmingham office space – from feast to famine
Whilst in central Birmingham – including Edgbaston and St Paul’s Square – there is currently approximately 1.1m sq ft of Grade ‘A’ office space available, when looking at the city core alone this falls to 800,000 sq ft. Over 200,000 sq ft of this is supplied within a single property – Birmingham’s landmark office development, Colmore Plaza.
At present, there is only one planned Birmingham office development which will provide additional Grade ‘A’ office space in Birmingham by Q1 2013 – Ballymore’s 2 Snow Hill scheme. Combined with an average Birmingham office take-up of 737,000 sq ft per annum over the last 4 years, the current supply of Birmingham office space could reduce drastically over the next 12-18 months.
Although there are several office schemes in Birmingham with detailed planning consents in place, these are unlikely to commence due to a lack of appetite by the banks to fund speculative office developments. We will therefore return to a pre-let/pre-sale market for larger office occupiers in Birmingham.
For companies with an office lease end or lease break at any point within the next three years, now is the time to act. By taking advantage of the current office supply situation and the deals that are subsequently available, a cash-neutral office move can still be possible, even where superior office accommodation is being taken. Once the supply for Grade ‘A’ office space in Birmingham Central falls to approximately 500,000 sq ft, this will be the catalyst for rents and incentives to harden.
An office move can also be a lengthy process, particularly if the office relocation is designed to achieve optimum efficiencies. A detailed space plan and office space review is essential to fully understand a company’s requirements and appreciate how the office space is used on a day-to-day basis. Add to this sufficient time to complete lease negotiations, legals and the implementation of an office fit out and it is easy to see how lengthy the process can become.
In summary, the advice is to act now, whilst the market for Birmingham office space is still on your side.