Commonweath Games letting dominates one of best Birmingham office market first quarters
The Birmingham office market started 2019 with the best first quarter for take-up since 2016, achieving 194,014 sq ft of sales and lettings across 25 deals, according to Birmingham-based independent commercial property agency KWB.
The figures were dominated by a letting of 72,261 sq ft at One Brindleyplace to the team that will deliver the 2022 Commonwealth Games, a deal which accounted for 37% of take up in the quarter. The second largest transaction of the quarter was to law firm Irwin Mitchell of 46,750 sq ft, in a deal which resulted in the Colmore Building being fully let for the first time.
“Thanks to the diversity of occupiers taking space, and the large lettings to the Commonwealth Games and Irwin Mitchell, the first quarter was one of the strongest since the recession, second only to Q1 2016,” says Malcolm Jones, KWB’s Director of Office Agency, writing in KWB’s Q1 2019 Birmingham Office Market Report.
Two of the top three deals were to public sector bodies. In addition to the Commonwealth Games, the third largest letting was to the NHS which took 10,917 sq ft at the Wesleyan Building/1 Colmore Circus.
“Mr Jones continues: “The public sector, and companies servicing the public sector, have frequently appeared at the top of the market over recent years. Last year, we saw large lettings to the Secretary of State, Home Office, General Dental Council and Network Rail – to name a few. These lettings represented a significant amount of the space taken overall in 2018.
“Given that as much as 800,000 sq ft of office space requirements for quasi-governmental bodies are in the marketplace at this time, the public sector is likely to continue to top the list of quarterly transactions.
“Q2 2019 looks set to be a quiet quarter, and that is understandable given the current uncertainty surrounding the fulfilment of the EU referendum. There are significant office requirements, though some of these enquiries may not currently be in the market. Some companies are taking the view that if they don’t need to make a decision imminently they should hold off.
“Furthermore, landlords will be inclined to agree to short extensions – particularly if they don’t have an occupier lined up to fill the space. Such extensions are likely to have been agreed at the end of last year, and we are aware of a number of landlords that had already taken the decision not to serve notice on occupied properties.
“That said, we anticipate seeing an upturn in enquiries and transactions during Q3 and Q4, as it remains the case that many lease events are due to take place this year,” concludes Mr Jones.
Each quarter KWB publishes research into the Birmingham city centre office market, listing all the office transactions and providing its view of the current and future market. Further details about the current research can be found here. Further information is available from Malcolm Jones on tel. 0121 233 2330 or via email firstname.lastname@example.org