Birmingham office market research — Quarter 3 2021

CGI of One Centenary Way, Paradise, Birmingham city centre – KWB Birmingham office market research
CGI of One Centenary Way, Paradise, Birmingham city centre – KWB Birmingham office market research

The Birmingham office market enjoyed an excellent Quarter 3 take-up.

Latent demand and the serviced office market delivered large deals, with 242,901 sq ft secured across 19 transactions. The top five transactions totalled almost 192,000 sq ft, 79% of the Q3 total for the Birmingham office market. It’s the top end of the market, securing some of the best quality office space – both currently available and forthcoming – that has led to such a great quarter.

Q3 2021 stats

2 4 2 , 9 0 1

total take-up (sq ft)

6 8 , 4 7 9

largest deal (sq ft)

1 9

total transactions

Birmingham office market at a glance

  • Arup to relocate to Birmingham city centre – largest letting relocates from Solihull
  • Atkins leaves Axis – in consolidation and flight to quality
  • Serviced offices perking up – x+why’s first locations outside London
  • Take-up begins at 103 Colmore Row – off to a flying start with 20% pre-let so far
  • Cornerblock’s continued success – two lettings demonstrate continued appeal
  • Out-of-town, into the city – could this be a growing trend?
  • And there’s more – 100,000+ sq ft in deals outside the figures
  • Stop the press – Q4 glimpses 200,000 sq ft early pre-let
  • Outlook – what lies ahead for Birmingham city centre

Key transactions

Office buildingSize (sq ft)OccupierBusiness sector
One Centenary Way68,479ArupCivil engineering
Six Brindleyplace40,616x+whyServiced offices provider
Two Chamberlain Square36,057AtkinsCivil engineering
103 Colmore Row34,500x+whyServiced offices provider
103 Colmore Row12,146Tilney Smith WilliamsonFinancial planning
Total191,79879% of take-up

Arup to relocate to Birmingham city centre

Under construction – One Centenary Way, Paradise, Birmingham city centre

Civil engineering giant, Arup was responsible for the largest letting of the quarter and, indeed, the year-to-date, taking 68,479 sq ft at One Centenary Way. The transaction, which is technically a pre-let, will accommodate a relocation from Arup’s current out-of-town offices on Blythe Valley Business Park, Solihull, which represents their third largest global office.

Scheduled to move a team of almost 1,000 colleagues from its Solihull Midlands Campus in 2023, Arup says that its new offices at One Centenary Way will be a ‘new global hub’. The hub will serve as a meeting point for Arup’s 6,000 UK staff.

One Centenary Way, which is currently under construction, has been chosen by Arup for a number of reasons, including connectivity and sustainability.

Director, Mark Jones says: “We are making a significant investment in our new office, which allows us to be better connected to our clients and collaborators. It also supports our intention to attract and develop the next generation of Arup talent.

“The move is a natural progression for us; it supports the next step in our sustainable development journey and is part of Arup’s global commitment to be net-zero carbon by 2030.”

Such words are a great vote of confidence in the proposition of Birmingham city centre  and, of course, the specification of One Centenary Way.


Atkins leaves Axis

Two Chamberlain Square, Paradise, Birmingham city centre offices
Two Chamberlain Square, Paradise, Birmingham city centre

Last quarter, we reported on the redevelopment of the Axis building, which has led to a number of significant lettings in the city centre – as occupiers vacate the space to allow for refurbishment.

The latest company to take space in order to relocate is civil engineering business, Atkins, which has taken 36,057 sq ft of brand-new space at Two Chamberlain Square. This relocation represents a flight to quality, as newly built Two Chamberlain Square offers some of the highest quality office space in Birmingham city centre. It’s also a consolidation, as Atkins is understood to have been occupying 50,000-60,000 sq ft at Axis and is now taking around two-thirds of that.

Serviced offices perking up

Six Brindleyplace, Birmingham city centre

With two lettings to serviced office operator x+why this quarter – their first locations outside London – the return of activity from serviced offices operators is in full swing. In Q2, we saw managed and serviced office operator, IWG, take 50,000 sq ft of office space at the newly refurbished Mailbox. x+why’s two transactions this quarter, at Six Brindleyplace and 103 Colmore Row, totalled 75,116 sq ft.

In 2020, we only saw one letting to a serviced office operator. However, in the preceding three years, this sector had been one of the dominant sectors taking office space. The pandemic had a devastating impact on the serviced office market. Indeed, during last year, WeWork, which took significant amounts of space at three Birmingham city centre locations in 2019, freed itself of its commitment to two of them in the following year. In fact, x+why has taken space at one of the locations that WeWork has vacated in Six Brindleyplace, which also saw a letting of 28,267 sq ft to the Commonwealth Games in Q2.

This year, major serviced office operators are refreshing their interest in Birmingham city centre with 125,116 sq ft already let to the sector. There are still multiple operators currently looking to take office space in Birmingham for their serviced offering and they’re considering some of the highest quality space on the market.

The advantages of serviced office space, such as the inclusion of amenities, utilities, connectivity, furniture and flexibility, come at a cost. Per sq ft, serviced office space could cost as much as three times that of traditional office space. When you consider that new office space in Birmingham city centre is priced at as much as £37.50 per sq ft on a traditional lease basis – serviced offices in these landmark buildings could work out at well over £100 per sq ft.

This would seem to suggest that those taking serviced office space, such as x+why’s upcoming offering within 103 Colmore Row, will have specific requirements, such as:

  • Prestigious accommodation in-line with their brand
  • Proximity to a major client
  • Being part of a ‘community’ that enhances their business

It’s also worth considering that in most larger buildings, the minimum size of letting will be of a significant size. Therefore, for many businesses with smaller space requirements, the only way to occupy a new landmark building in Birmingham city centre will be within a serviced or managed office operation.

All that being said, serviced offices aren’t for all, no matter the specification or prestige of the building. For some sectors, such as legal, a level of privacy is required that serviced offices can struggle to provide. For these types of occupier, landlords offering space on a traditional basis who can offer a high quality office environment together with a desirable level of flexibility can attract good lettings.

Take-up begins at 103 Colmore Row

103 Colmore Row, Birmingham city centre – KWB Birmingham office market research
103 Colmore Row, Birmingham city centre

103 Colmore Row, constructed on the site of the old NatWest building, stands at 26 storeys tall, offering 230,084 sq ft of Grade ‘A’ office space and featuring a four-storey winter garden.

The new building, nearing completion early next year, has seen a total of 46,646 sq ft transacted this quarter across two lettings, representing 20% of the development.

The first of the lettings was to flexible office provider, x+why, which has taken 34,500 sq ft. As part of the lettings strategy, the team behind the marketing of 103 Colmore Row sought a serviced office operator to establish a flexible offering within the building and selected x+why.

Paul Pritchard, director at Tristan Capital Partners, which co-owns the development, said: “We shortlisted a number of flex space operators, but x+why has broken the mould in this market. They are true disruptors, and we are excited to set a new benchmark for office occupiers and to address the undersupply of flex space in Birmingham.”

The second letting was to financial planners, Tilney Smith Williamson, which took 12,146 sq ft. This transaction was secured on a 10-year agreement and represents a relocation just a short distance from their existing offices at Baskerville House.

These two lettings amount to an encouraging start for the new building, which is expected to complete by the end of the year, with 176,985 sq ft of space remaining.

Cornerblock’s continued success

Cornerblock in Birmingham’s Colmore Business District

In 2017, an £11.5m refurbishment by Bruntwood was completed at Cornerblock. The former 2 Cornwall Street building, in the heart of Birmingham’s Colmore Business District, underwent extensive modernisation throughout, with new build extensions across the site. This saw the building rise by five floors in places, increasing square footage to a total of 110,000 sq ft.

With a variety of amenities installed, and the integration of floor-to-ceiling envelope glazing offering panoramic views across Birmingham city centre, Cornerblock quickly became a popular location for lettings.

This quarter, Cornerblock secured two lettings totalling 14,576 sq ft, demonstrating the continued appeal of the building and the investment it received four years ago.

OccupierSize (sq ft)Business Sector
Sedgwick International UK6,550Insurance
  • Software company, Kainos, took 8,026 sq ft of space at Cornerblock – a letting which will see the business relocate from Alpha in the city centre. The company has embarked on a number of recruitment drives over the past few years and this new space should support their plans for growth.
  • Insurer, Sedgwick International UK, took 6,550 sq ft at Cornerblock, a letting that will house a team currently based at 3160 Park Square, Solihull Parkway on Birmingham Business Park. This is another example of an out-of-town business taking space in Birmingham city centre, looking for high quality office space and great connectivity.

Out-of-town, into the city

West Midlands Metro
West Midlands Metro will eventually serve over 80 tram stops, more than 20 transport interchanges and link Wolverhampton, Birmingham, Dudley, Brierley Hill, Digbeth, North Solihull, Birmingham Airport, the NEC and HS2.

With a couple of companies committing, this quarter, to a relocation from Birmingham’s out-of-town office market to Birmingham city centre, could this be a growing trend?

There are many factors – pros and cons – for such a move, with each of these markets offering their own list of benefits.

The single, largest challenge within the out-of-town office market continues to be the lack of supply of large, high quality office stock and, for those businesses that require this, they have had to look towards Birmingham city centre.

Some occupiers have also seen a shift in their priorities – whether it be the requirement for greater public transport networks or the demographic of the local talent pool – making city centre offices more appropriate for their requirements.

And there’s more for the Birmingham office market

In addition to the strong quarter figures being achieved in Birmingham city centre, 109,326 sq ft was also transacted in deals that do not qualify for inclusion within the Birmingham office market reporting. These included:

  • Investream taking 56,895 sq ft – the entirety of Imperial House with vacant possession – for a type of ‘bricks and mortar Dragon’s Den’, investing in and creating a community of start-up businesses within the building.
  • Arden University, who are headquartered at Middlemarch Business Park in Coventry, taking 19,738 sq ft at Lock 14, 39 Summer Row, representing a change of use from offices to education.
  • BIMM (British and Irish Modern Music Institute) taking 17,330 sq ft at Rea Studios, Digbeth – a perfect location for their dance school and music studios.
  • The Indian Consulate has taken Gamgee House, representing 15,363 sq ft, located outside the Birmingham office market catchment. This was vacated by employee benefits provider BHSF in their relocation this quarter to 54 Hagley Road in Edgbaston.

In effect, these transactions represent a reduction in office stock of c. 100,000 sq ft but being countered by the new high spec developments coming on stream in Colmore Row, Paradise and Arena Central.

Stop the press

5 Centenary Square, Arena Central, Birmingham city centre – Birmingham office market research
5 Centenary Square, Arena Central, Birmingham city centre – viewed from Centenary Square

At the beginning of Q4, it has been revealed that the Government Property Agency is close to signing a pre-let on 200,000 sq ft at Five Centenary Square. Designed by architects, Make, 5 Centenary Square is the third office building to be developed at Kier Property’s Birmingham city centre Arena Central.

This is the latest in a series of major lettings in this area of the city and the 10-storey building will be part of the mixed-use scheme in Broad Street where occupiers already include both HSBC UK and HMRC.

Outlook for Birmingham office market

As we see the first lettings take place at 103 Colmore Row, it’s reassuring that the new buildings currently coming out of the ground are securing pre-lets. The largest example of this was almost 300,000 sq ft of Three Snowhill being pre-let to BT whilst still under construction. BT has now pledged to recruit 1,000 new positions for the building.

In some respects, this represents a new era of activity, and hunger for new office space, for Birmingham city centre, as other new builds in the past have taken time to let. Now, Birmingham is clearly a city in which a developer can invest with confidence, as speculative developments – and the significant investment they represent – are being rewarded prior to their completion.

In contrast, in the out-of-town office market, there has been notable reluctance in building new office space speculatively – albeit with one or two exceptions. Nevertheless, construction is most definitely happening in areas such as Solihull, but it is for industrial space. The high demand for warehousing and manufacturing space, the yields it can generate and the comparative lower cost to build such developments, make them an attractive proposition.

We have seen a flight to quality for the largest transactions, and that is likely to continue. Whilst many of these headline deals are at new build space, that doesn’t mean that landlords of existing buildings can’t learn from them. Quite the opposite, in fact. Thorough refurbishment that significantly raises the quality of office space, including major overhaul of M&E, is likely to make the property far more appealing to a market thirsty for high specification office space – and will, of course, command a higher rent too.

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

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