Birmingham office market research — Quarter 1 2021

5 Centenary Square, Arena Central, Birmingham city centre

With Q1 spent in lockdown, it’s unsurprising that the Birmingham office market’s symptoms of the ‘COVID year’ have lingered on, with just 49,837 sq ft transacted. However, bigger and brighter things are ahead, thanks to the Department for Transport and Goldman Sachs.

The lower end of the Birmingham office market saw a typically strong number of transactions, with 12 deals between 1-3,000 sq ft. However, it struggled elsewhere. The largest letting was to the Department for Work and Pensions, which took 16,499 sq ft at B1 Summer Hill Road – having already taken 48,787 sq ft there in Q2 last year.

Q1 2021 stats

4 9 , 8 3 7

total take-up (sq ft)

1 6 , 4 9 9

largest deal (sq ft)

2 0

total transactions

Birmingham office market at a glance

  • DWP takes more space
  • No big deals but there are big requirements
  • Goldman Sachs
  • Serviced offices bounce back early
  • Flexibility should be at the top of a landlord’s agenda
  • ‘The Return’ is in full swing
  • Building and planning to build continues
  • New transport infrastructure at Eastside
  • Outlook

DWP takes more space

B1 Summer Hill Road, Birmingham Jewellery Quarter
B1 Summer Hill Road, Birmingham Jewellery Quarter

The Department for Work and Pensions taking a further 16,499 sq ft at B1 Summer Hill Road represented the largest transaction in Q1 2021. Public sector often ‘tops the leaderboard’ in Birmingham. Over recent years, the City has been the location of a number of major office space consolidations for public sector and quasi-government bodies.

The Department for Work and Pensions is the UK’s largest public service department. Government departments, such as DWP, will face new demands over the coming years to help the country through the impact of coronavirus. This department has certainly been one of the most vital services throughout the past 12 months. It has been responsible for both administering the Government’s furlough system, designed to protect millions of British jobs, as well as handling the significant increase in demand for Universal Credit.

Prior to the Q2 2020 and Q1 2021 lettings at B1 Summer Hill Road, the DWP had two main offices in the City. One was located at Five Ways House, which houses back-of-house operations and welcomes visitors for Health and Disabilities Assessments, and the other was another back-of-house location at Temple Row House. In addition to this, the DWP also has several Jobcentres in the City.

Located in Birmingham’s Jewellery Quarter, B1 is a former industrial building that was converted in the mid-2000s to over 90,000 sq ft of offices, offering large open plan floorplates and competitive occupational costs. The building, which also houses Birmingham and Solihull Mental Health NHS Foundation Trust, is fully let because of this latest transaction and will provide a significant regional hub for The Department of Work and Pensions.

Key transactions

Office buildingSize (sq ft)OccupierBusiness sector
B1 Summer Hill Road16,499DWPGovernment
13 Bennetts Hill4,579Sandwell CollegeEducation
9 Colmore Row4,226Clarke WillmottLegal
154 Great Charles Street3,711Davies GroupInsurance
Exterior at 9 Colmore Row office space Birmingham city centre
9 Colmore Row, Birmingham city centre

Q1 2021 saw four lettings over 3,000 sq ft. Having already covered the Department for Work and Pensions, here are the stories behind the others:

  • Sandwell College will occupy 4,579 sq ft at 13 Bennetts Hill, sharing the building that has long been home to recruitment company, Pertemps.
  • Solicitors, Clarke Willmott, has taken 4,226 sq ft at 9 Colmore Row, relocating from its current offices at 138 Edmund Street. 9 Colmore Row is already a key location for professional services, with existing occupiers including Turley, Capital Dynamics, Brewin Dolphin, BNP Paribas and Smith & Williamson. The building recently received an upgrade, with refurbished reception area, new communal meeting room and breakout space, and a dedicated cycling hub and high-quality changing facilities in the basement.
  • Insurance company, Davies Group, has secured 3,711 sq ft at 154 Great Charles Street, which has recently been redesigned and undergone a comprehensive office refurbishment.
Newly remodelled reception at 154 Great Charles Street, Birmingham city centre
Newly remodelled reception at 154 Great Charles Street, Birmingham city centre

No big deals – but there are big requirements

Office lettings of 100,000+ sq ft are a common fixture in the annual Birmingham office market transactions, tending to represent significant inward investment or a major office space consolidation. Last year’s letting of Three Snowhill to BT of 283,073 sq ft, for example, represented 54% of the market’s total annual take-up.

Whilst Q1 2021 did not secure any landmark deals, there are landmark requirements in the marketplace. One such deal will be the Department for Transport (DfT), which is set to open a headquarters office in Birmingham city centre, for which we understand the requirement to be for c. 100,000-150,000 sq ft.

Given the advancements in progress on the construction of HS2, which has its HQ at Birmingham’s Two Snowhill, the decision to headquarter the DfT in the City makes great sense.

Latest CGI of the new HS2 Curzon Street Station, Birmingham
Latest CGI of the new HS2 Curzon Street Station, Birmingham

It’s been announced that the DfT’s new offices will create 650 jobs by 2025 in an excellent employment story for the City. The Birmingham headquarters will also include new ministerial offices, to allow Government ministers to spend a significant amount of time here.

In addition to this HQ, the DfT will also open a Northern Hub in Leeds, in order to give a far more national approach and influence to decision-making, with the Whitehall headquarters also continuing.

Goldman Sachs

In April, it was revealed that international banking giant, Goldman Sachs, would be opening a Birmingham office in Q3 2021. This may well provide the Birmingham office market with one of its largest transactions this year. Although the size of the requirement is not currently known, according to the bank, the office will eventually house “several hundred”.

The Birmingham office is understood to serve as a “technology hub” and will house some of the bank’s existing software engineers, as well as many new recruits.

Staffing is a considerable factor in the bank choosing Birmingham. Goldman Sachs said the City has “a strong and deep new talent pool, excellent academic institutions, a growing technology sector and longstanding leadership in STEM industries”.

This move is also a bold statement supporting office working. Goldman Sachs’s boss, David Solomon has been very vocal on rejecting working from home as the new norm following the pandemic, saying: “I do think for a business like ours, which is an innovative, collaborative apprenticeship culture, this is not ideal for us. And it’s not a new normal. It’s an aberration that we’re going to correct as soon as possible.”

Birmingham has a strong financial sector, with several major banks taking significant space over the past 10-20 years. Most recently, HSBC took c. 210,000 sq ft in the form of a pre-let at 2 Arena Central in 2015. The company then began the actual relocation in 2017. This letting represented a big move for the bank, as it relocated many staff – some coming from its London offices.

1 Centenary Square, Arena Central, Birmingham city centre
1 Centenary Square, Arena Central, Birmingham city centre

Enquiries elsewhere in the market

It’s not just landmark requirements that are back in the market either, there are plenty of businesses out there actively seeking mid-sized office space. We know of at least seven or eight enquiries for 10,000+ sq ft that are currently in the marketplace, with some significantly larger than that.

KWB Director of Office Agency, Malcolm Jones, said: “We’re all aware of the quietness of the market in 2020, which was propped up massively by the letting to BT at Three Snowhill. We also know that flexibility has risen even further up the list of priorities for many occupiers. However, whilst it’s going to take time for the office market to return to its full strength, the level of enquiries is incredibly promising.”

Serviced offices bouncing back early

Unsurprisingly, serviced offices took a major hit last year. When lockdown came into effect in March 2020, serviced office space quickly became vacant, and then dormant. With the flexibility of serviced office licences, these occupiers were free to exit their contracts in a way that is not available to the traditional leaseholder.

However, serviced office operators have been seeing occupiers flooding back, earlier and faster than expected. This is encouraging for the office market as a whole, especially when considering the volume of Birmingham city centre office space let to serviced office operators.

It’s not just companies that were already in serviced offices pre-pandemic either. Serviced office provider, UBCUK’s Managing Director, Richard Johnson, reported to KWB: “These companies aren’t already operating in serviced office space but, without exception, they are looking to take advantage of break clauses, expiry dates or other lease events at their current offices to make their operating model more flexible.”

This confirms the anticipated drive for more flexibility, in light of the pandemic and some changes in working practices. Interestingly, in addition, Richard also said: “Before COVID, our typical client would want two to five workstations, but we’re now consistently seeing enquiries for 15, 20 and even 30”.

UBCUK serviced offices Birmingham

Flexibility should be at the top of a landlord’s agenda

Whilst serviced offices may experience a surge in popularity over the next 12-18 months, they’re still not for everyone. A traditional office lease provides important benefits for an occupier that serviced offices do not. Landlords, therefore, have an excellent opportunity to attract new occupiers – if they can provide a sufficiently flexible offering.

After all, the cost of serviced office flexibility can be double or even triple that of similar space available on a traditional lease. Not only that but, amongst other things, the agreement of a traditional lease allows an occupier to secure their occupancy for a longer period of time. This is ideal for those with long-term operations and extensive future planning.

‘The Return’ is in full swing

Slowly but surely, office-based workforces are returning to the workplace. It was recently reported that over half of households are commuting again. Whilst it’s still early days and the ‘work from home if you can’ instruction from the Government remains in place, those particularly with children back at school are either going back to the office or are keen to return.

We expect that once the work-from-home instruction is lifted, many more will be reunited with their desks and work peers, for the first time in months. We’re sure many will appreciate a few less meetings on Zoom or Microsoft Teams, as home-working fatigue has truly set in by now.

The message from Big Tech, often the most forward-thinking of industries, is that the togetherness and collaboration of the office environment is sincerely missed. So much so, that some leading tech businesses, such as Google, have moved forward their timetable for returning to the office.

Building and planning to build continues

With several new build office buildings recently completed and still underway, plans have now been revealed for the latest major office property in the works.

The as yet unnamed building will provide 218,000 sq ft of new high quality office space in Birmingham city centre. To be situated between the City and the Peace Gardens, the building is being designed by Corstorphine + Wright and will open up a new passageway to connect with the existing Chapmans Passageway.

A planning application has been filed and Stephen Hemming, Director in LSH’s Birmingham Planning, Development & Regeneration team, said: “Recent LSH research shows that occupiers will look for ‘quality over quantity’ when seeking new office space and this development will deliver that with a fantastic design and specification, which will be a welcome addition to the current office stock.”

Also moving forward are plans to build the next office building at Arena Central, 5 Centenary Square. Developer, Kier, is planning the construction of what will be a 264,000 sq ft office property, having been approved by Birmingham City Council. The proposed plans had been amended to add a further floor of 25,000 sq ft, after receiving strong interest from prospective tenants. This could potentially mean that a major pre-let for the property could soon be forthcoming.

Notable office developments currently under construction in the City include:

• 103 Colmore Row (pictured here, well under construction) – a 26-storey, 230,084 sq ft office building on the former site of NatWest Tower.

• One Centenary Way – a 13-storey, 280,000 sq ft office property on the new Paradise development.

New transport infrastructure at Eastside

With so much new office space being built and an expectation of inward investors coming to Birmingham to fill that space, the City needs to also see an improvement in transport infrastructure. Metro has progressed greatly within the City over the past year, with works having made their way up Broad Street out of the City’s core, to Hagley Road.

Now, we’re seeing works elsewhere on the growing tram system, which will play an increasingly important role as Birmingham’s Clean Air Zone nudges commuters away from driving to work. In March, work began on the Metro’s expansion into Eastside – taking in Rea Street, Mill Lane and Stone Yard.

West Midlands Metro is now expanding to the east of Birmingham city centre
West Midlands Metro is now expanding to the east of Birmingham city centre


Q3 and Q4 of 2021 are shaping up to be, potentially, very healthy quarters, whilst Q2 is likely to be fairly similar to Q1. The requirements of the Department for Transport and Goldman Sachs will find their homes before the end of the year, delivering two major deals for the Birmingham office market. These will help the year achieve a far better finish than its start.

See full details of the transactions featured in our Birmingham office market research, comprising office space in Birmingham city centre and Edgbaston.

For more information on the Birmingham office market, please contact Nigel Tripp on 0121 233 2330 or email To register for future research updates, click here. See also our M42 and Solihull office market research.