Birmingham city centre office market 2025 H1 review

Key Birmingham office market 2025 transactions

Having accumulated a total take-up of 182,794 sq ft in six months, Birmingham’s commercial property market has undoubtedly faltered in its impressive upward trend since the pandemic.

There are many key factors that can be attributed to this, and none may be greater than the lack of a singular, major deal materialising thus far. Deals such as 2024’s 189,053 sq ft sale of 10 Woodcock Street and BT’s record-breaking transaction of 283,073 sq ft at Three Snowhill in 2020, can completely skew the data and long-term averages.

In fact, the aforementioned BT deal was so transformative that the transaction was responsible for 54% of the entire year’s 520,810 sq ft take-up. Without it, 2020 would have only seen 237,737 sq ft taken across the entire 12 months.

Furthermore, several sectors that had proved highly reliable in 2024 have now slowed in their accumulation of space. TMT (Technology, Media and Telecoms) and Education Including recruitment and training) together acquired 491,136 sq ft in 2024 – 58% of the overall take-up. Meanwhile in 2025, thus far they have taken just 6% and 4% respectively.

1 Victoria Square lease is H1’s biggest

The largest deal of the Birmingham office market 2025 H1 is Covalt’s lease of 27,000 sq ft at 1 Victoria Square, a prominent property in the ever-reliable Colmore Business District. The Q2 transaction comprising the ground, third and sixth floors of the building accounts for 15% of the H1 take-up in the city centre.

However, it is worth noting that a ‘39^th’ deal of 70,000 sq ft to EY, which has been widely reported, remains incomplete and thus missing from this data. Moreover, Bruntwood SciTech’s lease of 50,000 sq ft of life sciences space at Birmingham Health Innovation Campus (BHIC) to the University of Birmingham for its new, ‘best-in-class’ training facility, falls narrowly outside the city centre catchment area.

These additional transactions are significant and their impact on the H1 figures, as well as the overall outlook for Birmingham’s commercial property market, should not be disregarded.

2025’s figures also define how pivotal the ‘six-figure, landmark deal’ has become to the commercial property market. Five out of the last ten years have seen their data skewed due to a singular deal – all of which appeared in our list of Birmingham’s largest office market deals. Most recently, 2024’s largest deal – the sale of all 189,053 sq ft of 10 Woodcock Street to Aston University, accounted for 56% of the year’s 337,236 sq ft Q3 total.

Serviced office providers offer new twist

Innovation and flexibility of space have been common trends in occupiers of recent office lettings in Birmingham. 2024 saw a shift in traditional education models with GBS taking several commercial spaces to convert them into teaching environments. Now we are seeing a similar pattern with a new style of serviced office provider.

Boasting some of the more substantial deals of H1, Gilbanks and Covalt both represent a more modern concept, focusing on managed office solutions that are flexible, premium-quality and meet ESG requirements.

Whilst it is difficult to say whether we can expect to see the same level of take-up that the Education sector accomplished previously, it will be interesting to see if further providers begin to show prominence within the CBD.

Professional services continue take-up

Having secured a total of 21 deals for 100,876 sq ft in H1 2025, 55% of the entire half’s take-up and transactions, the professional services sector continued its long streak of consistency within the uneven property market.

This substantial figure is an improvement on the already-strong 19% share for the entirety of 2024’s take-up. In fact, the professional services figure is so positive the sector is on track to meet its 5-year take-up average of 199,564 sq ft, despite the challenges of the current market climate.

Leading the sector is the Q1 transaction at 10 Brindleyplace, which saw insurance providers Phoenix Life take 25,107 sq ft in a move from the out-of-town Wythall Green location into the city centre. This dominant deal was then followed by CBRE securing 16,458 sq ft at the newly completed Three Chamberlain Square, and Turner & Townsend’s lease of 10,177 sq ft at 55 Colmore Row in Q2. These three noteworthy deals were supported over the six months by a further 18 transactions in the Professional Services sector – representing 59% of the total deals in the sub-10,000 sq ft size bracket.

CBD to suffer from lack of space?

Reaffirming its position as the strongest commercial area within the city centre, the Colmore Business District (CBD) saw 18 of H1’s 38 deals occur within its borders.

Although the CBD is on track to meet its average of 40 deals per year following the pandemic (2022-24), it is projecting a lower sq ft take-up than the previous three years. Peaking in 2022 with a total of 372,816 sq ft, 2023 and 2024 have shown a steady decrease in take-up – amassing 353,997 sq ft and 261,518 sq ft respectively.

Now with 2025’s figures suggesting the CBD may take 240,000 sq ft for the year, it seems clear that space is now at a premium in the area, with many key buildings at capacity or offering limited availability.

Potential occupiers may now have to postpone possible moves to the CBD or look for alternatives just outside the CBD, such as those closer to New Street and Broad Street, or slightly further afield fringe areas, such as Digbeth, Aston and the Knowledge Quarter, the Jewellery Quarter and Edgbaston.

It should be noted that the Solihull and M42 corridor has recorded it strongest take-up in five years over H1 2025. This also suggests that many businesses have had to be flexible in their options and take space in less central regions.

Economic uncertainty and risk avoidance

The global economy has continued to convey a sense of instability in 2025. Ongoing conflicts, political unrest and a UK recession have all had their impact on the local business climate and, potentially, the commercial property market.

For many, a move to new office space could be seen as an unmitigated risk, resulting in potentially high costs with no guarantee of satisfaction throughout their entire business.

Accountancy firms have already shown a reluctance to move. Their last major city centre transaction was PwC’s lease of 58,631 sq ft at Two Chamberlain Square, Paradise in 2017 (in addition to their earlier pre-let of 90,000 sq ft). With such monetary-focused businesses showing a recent history of extending their existing leases rather than relocating, it is easy to assume that other operations are avoiding risks also.

However, once this economic imbalance starts to realign, so too should the local economy, giving businesses more confidence to invest in new space. Even now, another member of the accountancy big four, EY, has been reported to have agreed a new letting in 2025, with more companies possibly following suit.

Desired Grade A space coming soon

As well as businesses themselves evolving, their needs from their workspaces are evolving too.

Continued efforts to entice teams back into offices since the pandemic and the rising need to embrace ESG responsibilities have meant a surge in demand for high-quality Grade A space within Birmingham city centre.

This is especially true for those looking for headquarters-style facilities and square footage. With larger suites, floors and entire properties locked into long-term leases, there is a sense that many have had to be patient – awaiting the completion of new builds and comprehensive office refurbishments.

Birmingham will soon see King Edward House, 35 Newhall Street, Maple House and 1 BEORMA PLACE all reach completion, aiming to follow recent successes in the city, such as Three Chamberlain Square and the entire Paradise development.

When asked about CBRE’s recent move to Chamberlain Square, Managing Director, Will Ventham said, “Three Chamberlain Square will allow us to accommodate more people, attract and retain the best talent and introduce additional facilities, including a client-facing business lounge, bigger event spaces and wellbeing provision for staff.”

Clearly, these larger, high-quality spaces will be highly sought after, giving the Birmingham office market significant uplift.

Regeneration projects to boost city

Birmingham city centre has seen increased commercial interest since work on HS2 first began in 2019. Now, with further regeneration projects moving out of planning stages, the city is set to improve upon this already strong interest for large investment opportunities.

Phase one of the £1.9bn Smithfield regeneration project is now underway, changing the city’s landscape entirely by 2035. The enormous investment plan will create over 882,000 sq ft of office space, as well as over 3,000 apartments and retail environments totalling upwards of 470,000 sq ft.

This major project is supported by the £100mn redevelopment plans for the former Pheonix ironworks site in Digbeth. This mixed-use neighbourhood scheme will see the area’s 260,000 sq ft crafted for media, education and commercial use, as well as a further 240 new homes.

Birmingham has already enticed BT, the BBC, HSBC and more key UK businesses to move their operations to the second city and these new projects will only drive interest further. With additional, brand-new space office available, as well as new residential options for an expanded talent pool and improved amenities – Birmingham’s future is an incredibly bright one.

Outlook for Birmingham office market 2025

Further market fluctuation

It stands to reason that H2 2025 could easily see vast improvements on the disappointing first half of the year. Whilst the global economy’s challenges could continue to affect the market heading into 2026, the lack of a major transaction in H1 may see the H2 data skewed again, as it has in many previous years.

Surprises from innovative businesses

Following the trends of the education sector in 2024 and the emerging serviced office providers in H1, it will be of great interest to the market to see if further innovative businesses take space in Birmingham city centre.

A landmark year for professional services

One of the most noteworthy points in H1, professional services’ positive take-up suggests a host of transactions will be completed in H2. With so many lucrative operations included in this sector, it’s likely it will remain as the most significant of the year.

Out-of-town markets to progress further

As noted in this report, the Solihull and M42 corridor market has benefitted from a strong H1. It will be interesting to see if this period of prosperity continues into the second half of 2025, with more businesses choosing these options over more central space.