Birmingham office market review Q2 2024

Key Birmingham office transactions

Birmingham’s office market continued its steady improvement since COVID, recording 168,512 sq ft over 29 deals and putting it on track for another year-on-year increase.

Top performing sectors in the Birmingham office market Q2 2024

Deals were agreed across a variety of sectors in Q2. Professional services, including commercial property agents, insurance and civil engineering, performed the strongest again this quarter with 12 lettings, bringing its half-yearly total to 18 and representing 38% of the market by number of deals. Professional services is typically a robust market sector, providing 39% of the deals in 2023 and 2022, and 50% in 2021. More details are reported in the story below.

TMT (technology, media and telecoms) followed with six office lettings in Birmingham in Q2, making a half-yearly total of 12 and 25% market share by number. In 2023, TMT accounted for 13% of office deals, 20% in 2022, and 16% in 2021. If strength in this sector continues, the market share for 2024 is likely to be the highest since the pandemic.

Other Birmingham office deals came from government, construction, manufacturing and healthcare sectors.

19% of take-up in H1 2024 is 5,001-10,000 sq ft

Of the 29 deals this quarter, only three are over 10,000 sq ft, with the Government’s Three Snowhill deal being the largest at nearly 59,000 sq ft.

19 office lettings in Birmingham this quarter were less than 5,000 sq ft, showing strength in the smaller-sized office market

Three Snowhill tops the quarter

The Government’s 58,697 sq ft deal at Three Snowhill represents nearly 35% of the quarter’s overall take-up of 168,512 sq ft. Joining BT in Three Snowhill, which has occupied 283,000 sq ft of the Birmingham office building since 2020, there is now only around 60,000 sq ft of office space remaining.

Three Snowhill offers occupiers Grade A office space with generous open-plan floor plates and modern facilities overlooking Birmingham’s central business district. Its façade with full-height glazing is distinctive, making it a prominent building on the city’s skyline.

Government and public sector lettings have done well in Birmingham in recent years, taking over 800,000 sq ft of office space since 2017. However, Three Snowhill is the biggest deal seen since Platform 21 in 2019. This 110,780 sq ft deal in Birmingham city centre was part of the previous Government’s initiative to reduce geographical inequality and invest in local authorities – a strategy previously coined ‘levelling up’. Platform 21 provided flexible office space on New Street to all government staff in and around Birmingham.

C&W and Howden provide significant deals

Commercial property agents Cushman & Wakefield have taken 11,596 sq ft of office space at One Colmore Square, while Howden’s deal of 10,164 sq ft is at 45 Church Street.

Cushman & Wakefield previously occupied One Colmore Square, so its move is within the same building. The company has taken around half of the 5th floor of One Colmore Square, downsizing from their previous occupancy to be more efficient in the use of space. Jon Leedham, Regional Managing Partner, Midlands, commented, “The main theme in shaping this move was engagement…with everyone in the Midlands and what they wanted to get from the accommodation.” Their newly refurbished contemporary offices with small collaboration spaces and individual desk set-ups, modern kitchen space, wellness areas and dedicated focus areas reflect this aim.

The Insurance company Howden has taken 10,164 sq ft at 45 Church Street. This iconic landmark building has undergone extensive refurbishment to offer occupiers modern facilities such as a newly configured reception with communal meeting and breakout areas, business lounge, roof terrace, cycle storage, showers and changing rooms.

City centre deals dominate Q2 2024

With 21 of the 29 Birmingham office market Q2 2024 deals taking place in Birmingham city centre – including the Colmore Business District – this central area continues to attract businesses seeking the prestige, excellent connections and modern amenities that these offices can offer. Birmingham’s Jewellery Quarter and Knowledge Quarter, Aston secured two office lettings each, while Edgbaston saw four.

In 2020, the number of office deals in Birmingham city centre fell to 37 across the whole year. Since then, figures have bounced back, with the H1 2024 figures of 36 deals being a strong indicator that this trend will continue. Following the pandemic and the concern that businesses would continue to implement work-from-home protocols, it is excellent news to see cities like Birmingham thriving again.

Over recent years, along with the new office builds we have seen in the city, landlords across numerous existing office buildings in Birmingham have invested significant time, money and effort in comprehensively refurbishing their office space. Many are offering a more rounded work-life balance approach by adding wellness areas, such as rooftop terraces and gyms, and sustainability-focused facilities like cycle storage, showers and changing areas, EV charging points and energy-efficient heating and cooling systems. This strategy fulfils the needs of today’s contemporary businesses who want these upgraded amenities to attract top talent and achieve their ESG goals.

Strong Q2 for professional services

With 12 office deals from the professional services sector in the Birmingham office market Q2 2024, totalling 48,711 sq ft, this sector represented the largest proportion of movement in Birmingham. The biggest of these deals were Cushman & Wakefield and Howden at 11,596 sq ft and 10,164 sq ft, respectively, as reported above.

Commercial property agent Harris Lamb took 5,391 sq ft on the fourth floor of 4 Brindleyplace. Moving from Edgbaston, it joins high-profile tenants, such as Deutsche Bank, Mercer, PageGroup, Unity Trust Bank and Deloitte, at this Grade A office space that overlooks Central Square, just moments away from the canalside.

The deal by wealth management provider Canaccord was the other office letting of more than 3,500 sq ft. Canaccord is relocating to the Jewellery Quarter, taking 3,729 sq ft at 4 St Phillips Place.

The professional services sector has traditionally performed well in the Birmingham office market. In 2023, it formed 33% of total take-up, 29% in 2022 and a significant 45% in 2021.

Green light for Smithfield

Great news for the Smithfield Birmingham project, as its regeneration plans across the 17-hectare site are approved. Developers Lendlease are working in collaboration with Birmingham City Council on these ambitious plans, which look to transform the area and create a new city centre destination.

Aiming to create 3,000 affordable new homes, 1.3 million sq ft of shops and workspace, and two public squares, the area around the Bullring Markets is set to become a new vibrant hub for Birmingham, creating thousands of new jobs and opportunities for the community.

Work on the scheme will take place over 15 years and be delivered in four phases. Among the 50 buildings planned for construction is the new ‘Ariel’ building, which will offer approximately 330,000 sq ft of high-quality office space, making up just a third of the total office space planned across the entire site.

Once complete, Smithfield will be a landmark site for Birmingham, attracting not only local talent but also national and international interest from individuals and families looking to make the UK’s second city their home.

£4.5m refurbishment for Centre City

The £4.5m refurbishment of the Birmingham city centre office building Centre City is another example of landlords recognising the need to update their office space to meet the needs of contemporary businesses.

Work started on this 20-storey building, located on the corner of Hill Street, earlier this month. Plans include the addition of a living wall, fitness facilities, a contemplation room and secure cycle storage. Once updated, the building will address key objectives of many forward-thinking businesses, such as sustainability and wellness. It will also address the new flexible working protocol with options for pay-as-you-go deskspace alongside traditional leased offices.

Situated within close reach of Birmingham New Street Station, Centre City benefits from good transport connections, while proximity to Bullring and its surrounding area provides excellent access to leisure facilities.

Originally constructed in the 1970s, the 210,000 sq ft Birmingham office building is currently owned by Bruntwood SciTech. Bruntwood has eight other properties in Birmingham, including Innovation Birmingham, Enterprise Wharf, ICentrum and Cornerblock.

The transformation of Centre City is due for completion in January 2025.

Technology talent heads to Birmingham city centre and Aston

Birmingham office market Q2 2024 sees six more TMT (technology, media and telecoms) businesses base their operations in either Birmingham city centre or the Birmingham Knowledge Quarter in Aston. Taking nearly 29,000 sq ft in total, these companies underline Birmingham as an attractive place to work for innovative businesses operating in the technology sector.

In 2023 and 2022, TMT accounted for only 9% of the office take-up in Birmingham and only 11% in 2021. In the first six months of 2024, 34% of take-up was from this sector, indicating that the investment in Birmingham’s development to become a forward-thinking city for businesses, research and innovation is paying off.

Companies choosing Birmingham this quarter include Softcat plc, Kagool, Terraquest and Digital Innk. The IT services provider Softcat plc signed a deal for 8,777 sq ft of newly refurbished office space in the Billiards Building (formerly 134 Edmund Street), located in the heart of Birmingham’s business district. Kagool also opted for Birmingham city centre, taking 8,627 sq ft in Rum Runner Works.

Meanwhile, the Birmingham Knowledge Quarter in Aston drew fleet management software services provider Digital Innk and smart building software provider Rocket GX. This district of Birmingham, which runs northeast from Aston University through Duddeston and Nechells to Aston, is part of the wider West Midlands Investment Zone. At the end of 2023, £160m of investment for this project was announced, with the aim of generating more than 30,000 jobs in the manufacturing sector. Billed as a fast-growing part of Birmingham, the Knowledge Quarter is quickly becoming a focal point for innovation in science, technology and enterprise in the city.

Edgbaston’s health & medical business community strengthens

Edgbaston’s reputation as a medical- and health-focused business centre continues as three key companies from this sector make the area their home.

The private day hospital, The Westbourne Centre, relocated from Church Road to Pinnacle House, situated off Harborne Road, Edgbaston. Bringing them closer to the city centre and within reach of Five Ways station, it will benefit from better connections for its staff and patients.

Meanwhile, private GP provider MyHealthcare Clinic signed a deal for 1,455 sq ft of office space at 10-11 Greenfield Crescent. This semi-pedestrianised road is part of the recently revamped Edgbaston Village, redeveloped to attract visitors to its eclectic mix of boutique shops, restaurants and lifestyle services.

Hearing aid manufacturer Medtex Worldwide agreed a lease for 1,120 sq ft of office space at 214C Hagley Road.

These new occupiers of Edgbaston join an array of existing healthcare-focused businesses, including Edgbaston Private Medical Practice, SpaMedica, Private Medical Clinic Birmingham, Kat & Co and the Priory Hospital.

Edgbaston and Selly Oak are renowned for their focus on medical and healthcare for the city, centred around the £545m Queen Elizabeth Hospital, which opened in 2010 and supports world-class research. Looking forward, the first phase of the Birmingham Health Innovation Campus in Aston Webb Boulevard, Selly Oak is due for completion in the summer of 2024. Offering 130,000 sq ft of top-quality lab and office space for healthcare innovation, this area’s role as a leader of healthcare excellence is only likely to grow stronger.

Outlook for Birmingham office market 2024

Three Chamberlain Square – Work continues on this new office building at Paradise Birmingham. Scheduled to open in 2025, it plans to offer 189,000 sq ft of Grade A office space over ten floors. Three Chamberlain Square will have a strong emphasis on sustainability, with a low-energy, low-carbon design and a goal of net zero, an objective the city hopes to achieve by 2030.

X 10 Brindleyplace – Approximately 181,188 sq ft of office space is still available at this comprehensively refurbished building in Brindleyplace, completed in 2023. Offering large floor plates of over 27,000 sq ft across 12 floors and with all the high-quality amenities expected of contemporary office buildings, it is one of the few locations in Birmingham for businesses seeking a significant-sized space from which to operate.

Three Snowhill – Despite the significant Government deal agreed this quarter, there is still c. 60,000 sq ft of space remaining at Three Snowhill. Completed in 2019, this 17-storey building offers Grade A office space with floor plates up to 25,000 sq ft, a full-height central atrium, cycle storage and a boutique fitness centre with personal coaching and shower facilities.

Rum Runner Works – There is just one suite remaining in this remodelled office building situated on the canalside. Rum Runner Works offers a charming period character alongside modern office suites and facilities, and a sustainable approach, so it is unsurprising how quickly space in this office building was let.

Advice for occupiers and landlords

Advice for occupiers

For occupiers seeking extensive Grade A office space, KWB advises that you do not delay. Brand-new office space in Birmingham’s city centre is limited, with Two Chamberlain Square and 103 Colmore Row now fully occupied and Three Chamberlain Square not available until 2025 at the earliest.

Nonetheless, landlords are reacting to market demand for high-quality office space with good amenities and have invested significantly in refurbishing existing office buildings in Birmingham. This increase in refurbishments has provided a good variety of alternative available options for occupiers looking to base their business in the city centre or local vicinity.

Advice for landlords

Many companies are prioritising wellbeing, connectivity and sustainability to attract top talent – particularly from the younger generation, to enhance their brand reputation and fulfil their ESG goals. With companies seeking office buildings that cater to these needs, landlords should ensure that any refits are completed to the highest possible standards to remain competitive in the market.

The market for smaller office suites remains strong, with 65% of the deals completed in the first six months of 2024 in the 0-5,000 sq ft bracket. At the same time, the office market in Birmingham has seen a slight decline in deals from serviced office operators. This data could align with the increase in smaller space deals, as SMEs may be seeking more affordable options than serviced offices.

Investments in new developments and transport options in the region look promising for the Birmingham office market in the long term. These investments will enhance Birmingham’s reputation for innovation and high-quality business and leisure facilities, continuing to strengthen its future.