Birmingham city centre Quarter 3 2023

Lloyds Bank at Brindleyplace, for a while

The largest letting of both the quarter and the year so far was to Lloyds Bank, taking 59,896 sq ft at 6 Brindleyplace. The bank has taken x+why’s serviced office space within the building, which has been named Foundry. Signed on a two–year agreement, this deal will temporarily relocate 2,260 staff and facilitate the refurbishment of its existing offices at 125 Colmore Row. The letting represents the UK’s largest flexible office deal outside of London so far this year.

Rupert Dean, CEO and Co-founder of x+why, said: “We are thrilled to expand our footprint within Foundry in Birmingham and provide this 60,000 sq ft managed deal for Lloyds Banking Group. It’s a great story about how we can work within existing buildings to support larger requirements with a bespoke, low carbon, flexible space.” 

KWB has previously highlighted Brindleyplace as a location with the potential to offer major occupiers some of the best office space – at the right size – in Birmingham city centre. Brindleyplace’s proposition has changed significantly over recent years, with the development of the Metro system along Broad Street and the redevelopment of Arena Central and Chamberlain Square, all of which have made this area of the city very attractive to occupiers.

Striving for sustainability

Meanwhile, the refurbishment of 125 Colmore Row will see the building transform into a sustainable hub. The150,000 sq ft building was acquired in May last year by the West Midlands Pension Fund for £80 million. Now, it will be enhanced with a range of sustainability-focused investments driven by Lloyds’ 2030 sustainability targets. 

Sharon Doherty, Chief People & Places Officer at Lloyds Banking Group, said: “Birmingham is one of our key strategic hub sites where teams including our data, technology, customer and client-facing teams are based. This is why we’re making a significant investment in our Colmore Row office to create a state-of-the-art, sustainable hub where 2,260 of our colleagues can work collaboratively together in a refurbished office space.” 

Replacement of existing gas boilers with a heat pump system and installation of smart water monitoring systems are just a couple of examples of how Lloyds will shift energy reliance to sustainable sources and reduce its carbon footprint and water consumption. 

The refurbishment will see the installation of a café with workstations, as well as new electric vehicle charging points and further bike racks.

Alpha secures a quintet

Alpha, on the corner of Broad Street and Suffolk Street Queensway, secured five deals in Q3, totalling 24,612 sqft. The impressive array of sectors for these occupiers demonstrates the broad appeal this iconic 28-storey office building is currently enjoying.

The building was comprehensively refurbished in recent years, at a cost of £16.6 million, to offer high quality office space, which is now 85% let. The refurbishment also included the creation of Alpha Works, a flexible co-working space located on the 21st and 22nd floors. Alpha Works provides the building with a supply of potential occupiers that could later take space on a traditional basis once they have grown to sufficient size.

EFG brings it to 14 at 103

We would expect 103 Colmore Row, an incredible success story in recent quarters, to become fully income–producing in the coming months. Built on the former site of the NatWest Tower, the proposition of this building has consistently drawn strong interest since it came to market in 2021, securing five transactions totalling 95,992 sq ftin its first year, and six in its second totalling 69,921 sq ft.

In Q3, financial services provider, EFG Harris Allday took 12,162 sq ft at the building – representing 103’s 14thletting since it came to market and bringing the total amount of let space to 194,088 sq ft.

New space withdrawing quickly

Whilst the office market was quieter this quarter than Q2, deals can often be slow to complete over the summer and this can lead to a bumper Q4 with many deals completing in October.

However, given the popularity of new space over recent quarters, the availability of new build office stock that is ready to occupy has diminished. This may subsequently restrict occupiers in their options for their next office. The major focus of office construction over recent years has been the redevelopment of Paradise. Following several years of strong letting and pre-let activity, the availability now stands as follows:

Rum Runner Returns

Q3 saw the first letting at the newly launched Rum Runner Works off Broad Street, to Ricoh Digital Services,taking 3,561 sq ft at the property. This follows its reopening as an office building comprising 16,000 sq ft of officespace after a £2 million renovation by landlord, Picton.

Theo Holmes, who heads the office agency team at CBRE, said: “Picton has invested £2 million to reimagine Rum Runner Works, producing a truly special workspace environment to match its colourful history.” 

The building has been used for various purposes throughout its history, which dates back to the 1800s. Originally a Victorian glassworks, the building is well-known within the city for its time as a nightclub that helped launch the careers of major local bands such as Duran Duran, Dexy’s Midnight Runners and UB40.

Outlook for Birmingham office market

We expect to see several deals, where completion may have slowed over the summer period, to now appear in the Q4 figures. 

There are also major upcoming lettings to the public sector, including the commitment to a third Birmingham hub, which is expected to become a specialist transport office, housing up to 4,000 staff from both the Department for Transport and National Highways – alongside other departments. The Government Property Agency (GPA) hopes to open the site between 2027 and 2028 but is still searching for a suitable city-centre location. This may complete in Q4 or early in the new year. 

Birmingham already has two government hubs – 23 Stephenson Street and the HM Revenue & Customs office at Arena Central, with a total of 1,902 civil service roles that have been moved to the West Midlands since 2018. 

There’s certainly demand from the private sector in the Birmingham office market, too. During Birmingham’s recent Tech Week, 16th-20th October, it was announced that more than 1,000 jobs were being created in the West Midlands between a number of major tech businesses, with the majority set to be Birmingham-based.

Birmingham has enjoyed a steady flow of new office buildings for the past five years, but with availability of new space now dwindling, eyes turn to what’s next: 

• Three Chamberlain Square – the final office building at Paradise will offer nearly 200,000 sq ft in early 2025 
• Drum – the conversion of the former John Lewis store within Grand Central will deliver 200,000 sq ft of high quality office space and is expected to complete mid-2026 
• Beorma Quarter – the mixed-use development bordering the city’s core and Digbeth, opposite the Bullring and St Martin’s, is underway and will deliver 160,000 sq ft of offices across the first 12 floors of the 30-storey tower.

These may seem a way off, but outside the core there are interesting, more timely projects too. For example, Bruntwood will soon be launching its latest Birmingham office building, in Aston – Enterprise Wharf.

“Designed with digital and tech businesses in mind”, this building situated in the Knowledge Quarter comprises 10 floors, each offering 12,000 sq ft of contemporary, flexible office space.  

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