The out-of-town office market for Solihull and surrounding areas is seeing great activity; considering the annual long term average is 220,000 sq ft, this has been far surpassed already with almost 320,000 sq ft transacted for the year to date.
The 124,500 sq ft across 22 transactions in the quarter delivered an average letting size of 5,659 sq ft, which is a considerable 2,100 sq ft higher than the average found in the transaction results for Birmingham city centre, for the same quarter.
KWB’s Mark Robinson gives a detailed review of the latest quarter’s office space transactions, examining the individual deals and putting the findings into context. Here’s the most informative commentary of activity in the office space market in Birmingham, Solihull and the M42 corridor, this quarter.
Research highlights for offices in Solihull and the M42 corridor
- The largest letting in the quarter was office space taken at Birmingham Business Park – Canmoor secured IMI within 36,000 sq ft at 4060 Lakeside. Whilst IMI was already located in offices at Birmingham Business Park, they have increased their office space by 8,500 sq ft in the move to adjacent offices. In addition, Canmoor already has strong interest in the 28,000 sq ft building that they are vacating.
- Office market is vibrant throughout the M42 – Birmingham Business Park may be grabbing all the headlines, but the table below shows that there’s plenty happening elsewhere along the M42 corridor. Redditch andBromsgrove’s popularity continues to be consistent, even with office space availability being dangerously low in this area.
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- Competing air conditioning companies take space in the same neighbourhood, but competition between them is unlikely to cool off – air conditioning manufacturers Mitsubushi and Daikin, and installers Aspen Cooling have all taken space this quarter. These companies contribute to what continue to be the most active business sectors in the area, construction and consultancy.
- Future is bright for the market with large deals due to complete in early 2015 – as anticipated in Birmingham city centre, larger deals for offices in Solihull are expected to be signed off in the coming months. We anticipate these notable transactions to come to fruition in early 2015, given the timeframe inherent for completion on larger leases. This also means that the impressive statistics for 2014 are not a blip, with good figures continuing well into the New Year and beyond.
- KWB continues to lead the market for offices in Solihull and the M42 corridor – KWB has further extended their market share this quarter, securing 90,000 sq ft (72%) of the 125,000 sq ft of transactions for office space in Solihull and the M42 corridor. This equated to 14 of the 22 deals in total for the quarter. Of the total square footage for the year so far, KWB is responsible for 65%, or 34 of the 62 deals.
Research highlights for offices in Birmingham and Edgbaston
- Q3 was a much healthier quarter for transactions for office space in Birmingham city centre – even with the HS2 deal at Two Snowhill being absent from this quarter’s results, but expected to appear in Q4! With an increase of 37% over the previous quarter, the resulting 156,000 sq ft is a promising sign of growth and recovery, post-recession. Average letting size also increased by 9.2% on the previous quarter to 3,550 sq ft.
- The largest transaction for offices in Birmingham this quarter was Vodafone taking 23,000 sq ft at Colmore Plaza – also the second largest transaction of the year. Two other deals over 10,000 sq ft included the Office for Legal Complaints, relocating from Baskerville House to more cost effective premises at Edmund House in Quay Place, and the Valuation Office Agency’s relocation to Building 2 Broadway offices in Edgbaston.
- Speculative refurbishments are a hit this quarter! – Projects where premises have been refurbished in order to create desirable office space, with no pre lets, have received great interest this quarter. The joint venture between Bridges Ventures and Evenacres on the refurbished 158 Edmund Street has achieved an impressive five lettings in this quarter, totalling 19,386 sq ft. Other companies who have seen success with this include Circle Property and Hortons’ Estate, who have secured occupiers in their Cheltenham House and Innovation Court developments.
- HS2’s Two Snowhill deal is not the only notable transaction on the horizon – Although it was announced a few months ago, HS2’s acquisition of 100,000 sq ft of office space at Two Snowhill is yet to be signed off. We do, however, expect it to appear in Q4’s figures and this will be a huge boost to the 2014 end of year total. But this is not the only big deal expected to sign off in the final quarter – several notable office lettings are expected to appear in the statistics for Q4, namely HSBC’s expansion in 120 Edmund Street and Extra Energy’s relocation to Broadway offices in Edgbaston.
- HS2’s offices will boost further demand – We expect that, following completion of the HS2 letting, several main contractors and consultants will also seek to acquire a project office in Birmingham city centre to service this contract. We are starting to see searches initiate for some of these parties, who we expect to secure premises by mid-2015.
For more information, please contact Mark Robinson on 0121 212 5994 or firstname.lastname@example.org.