Outlook for Birmingham office market 2024
Buildings and developments on the horizon
- Three Chamberlain Square – Phase Two construction of Three Chamberlain Square is now well underway. The building is set to add a further 189,000 sq ft to the Paradise estate and is due for completion in 2025.
- One Ratcliffe Square Hotel – planning approval is also in place for a new 17-storey, 152-bedroom hotel on the corner of Paradise Street, as well as a new public square and a number of new pedestrianised streets.
- Phase Three of the Paradise development – construction is due to start later this year on a range of commercial and mixed-use buildings across the northern part of the site.
- Colmore Gate – plans were submitted in Q3 2023 to Birmingham City Council for the partial demolition, refurbishment and extension of Colmore Gate – a prominent office block in the Colmore Business District. The proposals would see the development of a new 26-storey tower and 10-storey shoulder building, which, according to the developer, Ashtrom Properties, could create thousands of new jobs and generate over £200 million in economic output annually.
- Beorma Tower – construction started in Q3 2023 on the 30-storey tower, providing new-build office space, available from 7,000 – 153,000 sq ft, across 12 floors. This building differs from those in the city core in that it also includes 17 upper floors of residential space.
ESG is coming of age in 2024 and beyond
- Biodiversity net gain – will come into effect on a phased basis in 2024, starting with larger schemes on 12 February and smaller schemes from April 2024.
- Increased focus on emissions – as the UK heads towards the 2030 target of reducing carbon emissions by 68%, Birmingham’s commercial property world can expect a focus on both the use of sustainable construction materials and the environmental impact of the construction phase. The latter can include the transport of materials, the type of machinery used and the potential for materials to be reused to avoid wastage.
- The Better Buildings Partnership – its toolkit on green leases was first published in 2013 and is due to be refreshed in early 2024. This could ignite discussions between landlords and tenants as to how environmental provisions can be included in their leases.
Advice for occupiers
As occupiers invest in Birmingham and strive to create the ideal environment for their teams, there is a universal focus on a property’s central location, connectivity and sustainability.
There is a need to retain and attract skilled staff, as employee expectations of the workplace have greatly increased since the pandemic.
From Colmore Business District to Chamberlain Square and Brindleyplace, occupiers are prioritising buildings with excellent transport links in and out of Birmingham, as well as easy access to retail and other local amenities. As more businesses embrace flexible working, occupiers are adapting accordingly to make hot-desking and hybrid working a reality.
With employees prioritising health and lifestyle as we continue to emerge from the global pandemic, more office buildings are integrating on-site gym facilities, cycle hubs and showers into their spaces.
We recommend occupiers look early for their next property as options will be limited in 2024. It’s also worth considering – can your current property be refurbished to better suit a flexible workplace?
If you’re a landlord considering refurbishment of your existing property, you’ll want to do this to the best possible standard to attract the best tenants.
However, whether a business is well established or fast-growing, value for money will continue to be their main driver as they navigate the cost-of-living crisis and how they incentivise employees to return to the office.
There is a notable upward trend in smaller occupiers taking up space below 3,000 sq ft across the city, with 62 transactions across 98,674 sq ft equating to 14% of annual take-up.
A property, such as Waterloo House with several lettings in 2023, is an excellent example of a building demonstrating the strong market for high-quality refurbishments that offer great value for money in the sub-£20 per sq ft rental market for smaller occupiers.