Birmingham office market research – quarter 3 2017

Q3 2017 delivered a very different ‘shot in the arm’ quarter of transactions for the Birmingham office market. The landmark HMRC pre-let of 3 Arena Central and a further 5 deals over 10,000 sq ft saw the total office space transacted in the quarter reach 402,076 sq ft.

Among many interesting stories, Q3 showed the continued drive for flexibility, as companies awarded HS2 contracts take managed office solutions, care of Instant Offices, which take the traditional lease on behalf of the occupier.

HMRC pre-let changes Birmingham office market fortunes

HMRC‘s landmark transaction at 3 Arena Central of 238,988 sq ft  – the largest Birmingham city centre pre-let in a decade – has granted the Birmingham office market a saving grace.

The letting is almost equal to the total square footage transacted by the Birmingham office market in the first half of 2017 – putting it on course to exceed its long-term average.

September brought the long-awaited and highly anticipated announcement of the location and details of HMRC’s consolidation of various Midlands office locations into a single property. Having been considering several options in the city for some time, including Three Snowhill, HMRC selected 3 Arena Central, next to HSBC’s new HQ in-waiting.

As a consequence of this consolidation, and as HMRC’s various departments begin to relocate to 3 Arena Central, the vacated offices will return to the market – providing much needed Birmingham city centre office space.

10-25,000 sq ft going strong

In 2017, we’ve seen a healthy number of office space transactions in the 10,000-25,000 sq ft bracket of the Birmingham office market. Q3 was no exception, as we see 6 deals in this bracket, sitting beneath the HMRC pre-let. Three of these are to Instant Offices, and represent other occupiers – as detailed in the next section.

Office buildingLocationSize (sq ft)OccupierSector
3 Arena CentralBirmingham city centre238,988HMRCGovernment
The Colmore BuildingBirmingham city centre23,388Hogan LovellsLegal
Cold Store, Beorma QuarterBirmingham Digbeth18,980Prince’s TrustCharity
55 Colmore RowBirmingham city centre16,960SavillsProperty / Professional services
19 Cornwall StreetBirmingham city centre16,362KierConstruction
CornerblockBirmingham city centre12,612Laing O’RourkeConstruction
CornerblockBirmingham city centre12,414FusionConstruction

arena central birmingham office market

Arena Central

Large occupiers choose managed offices for HS2 work

As an occupier, acquiring and relocating staff can be a complex and expensive process – with fit out costs, IT, dilapidations and a variety of other setup costs. For companies that need space easily and quickly at a new location, traditional methods can be a hindrance – so what’s the alternative?

With appearances in both Q2 and Q3, Instant Offices – who until this year had not been active in Birmingham, operating largely in London –  has successfully broken into the Birmingham office market offering flexible office solutions.

Altogether, Instant Offices’ procurements account for almost 50,000 sq ft (c. 8%) of the total office space transacted in the Birmingham office market this year – making it a trend not to be overlooked.

Furthermore, the reason for the venture into the Birmingham office market appears to be contracts; all occupiers taking space with Instant Offices are understood to be involved in the initial phases of the HS2 project.

LocationSize (sq ft)OccupierSector
Q2 2017
Gateway House7,607CapitaOutsourcing
Q3 2017
19 Cornwall Street16,362KierConstruction
Cornerblock12,612Laing O’RourkeConstruction

Instant Offices is understood to be taking traditional 10-year leases on these properties, a commitment the occupiers would otherwise have been expected to make themselves. Instant Offices provides these occupiers with a managed office solution, an arrangement which provides not only the benefit of flexibility, but also fixed, known budgeting as well – with utilities and other occupational costs included within a single price.

Managed office agreements tend to involve short terms, with rolling contracts – this means that the occupiers can end or extend occupancy in accordance with how long projects take to complete and whether or not they are retained for further HS2 phases.

Cornerblock has benefited highly from this trend and the services that Instant Offices provide – with HS2-contracted construction companies, Laing O’Rourke and Fusion both taking space totalling 25,000 sq ft.

Cornerblock offices, birmingham office market


19 Cornwall Street’s ownership recently changed hands from Standard Life to Kier Property. Kier has been awarded an HS2 contract and, in a slightly different arrangement to others of this trend, Kier had Instant Offices take a traditional lease at 19 Cornwall Street. In doing so, Kier then occupied the property with managed office solutions provided by Instant Offices, who took on the ancillary costs of the building.

At this point in time, occupiers are looking for more flexibility to ‘play it safe’ in a time of uncertainty. Cornerblock itself, and also the recently relaunched Alpha, may offer flexible offices that the market demands, but Instant Offices demonstrates a manufactured flexibility. With its foot now firmly in the door, we could see Instant Offices begin to do for typical Birmingham city centre occupiers, what they’ve done for HS2 contractors.

Prince’s Trust raises its stake and profile in Digbeth

In the third largest letting of the quarter, Prince’s Trust took a lease on 18,980 sq ft of Digbeth offices at the Beorma Quarter’s Cold Store. Prince’s Trust has moved to these offices from just around the corner, at 79 Warwick Street.

This is the largest office transaction for Digbeth in many years – and we would expect that the decision to remain in Digbeth, but in a larger and more prominent building, is a very good choice for the Trust.

The Trust’s work is reliant on being able to reach out and connect with young people – from a variety of backgrounds. As such, a more corporate setting in the central business district would likely be ill-suited to helping the charity to encourage further interest from the city’s young people.


International law firm, Hogan Lovells took 23,388 sq ft at The Colmore Building – tripling the size of its Birmingham office stake. Having already been in the building, this represents an expansion to a whole floor.

Michael Gallimore, Head of Hogan Lovells’ Birmingham office, told KWB:

“Since opening our Birmingham office we have built a consistently profitable and strong qualified lawyer and paralegal capability, handling increasingly complex cross-jurisdictional real estate, real estate finance, corporate and commercial and litigation work, as well as our Legal Delivery Centre which specialises in large due diligence and document review exercises, handling major projects for clients in the UK and around the world.

“Currently we have approximately 70 people based in Birmingham, and are looking to increase the range of services offered, capitalising on our successful investments in technology and legal project management. As the Birmingham office grows organically, we plan to utilise the additional space to provide a first class working environment with excellent amenities.”

Hogan Lovells has experienced great cost efficiency from its Birmingham office, and the decision to expand and potentially relocate some staff to these offices is inward investment that represents great confidence in the area.

Other expansions include:

  • Medgate, occupational health software company – took 8,832 sq ft in a relocation and expansion in Eleven Brindleyplace
  • Legal company DAC Beachcroft – took 4,400 sq ft at Tricorn House; having already been based here, they expanded further


Whilst HMRC’s pre-let deal – which represents the consolidation of nearly 4,000 staff located in offices around Birmingham – rides high above the other transactions in the quarter, it’s not the only substantial consolidation.

Savills, which merged with GBR Phoenix Beard last year, has moved out of two locations in Birmingham city centre into 16,960 sq ft at the newly refurbished and relaunched 55 Colmore Row, which – despite its heritage – is able to offer the substantial floorplates that corporate occupiers are looking for.

Bravo, Alpha

Alpha has continued to do well with lettings to recruiters, Allegis and property consultants, Malcolm Hollis – with both transactions amounting to an impressive 11,200 sq ft.

Owners, Commercial Estates Group (CEG), relaunched the property after a very well thought-through remodelling, repositioning and transformation, and the market’s response to these works was immediate.

As lettings accumulate at the property, Alpha is developing an enviable community of occupiers on site – which represents a total square footage transacted, so far this year, of 60,876 sq ft. CEG has targeted less corporate occupiers and sees these occupiers as clients, offering them managed services. Like other propcos, CEG now sees getting under the skin of occupiers – marketing to their demands and maintaining their ongoing customer satisfaction – as the way to maximise lettings and occupier retention.

Alpha’s popularity derives from providing cost-effective well refurbished office space with great access to public transport and the amenities of Birmingham city centre. Property owners that have made smart refurbishments to their office space, and brought it to market, are seeing excellent returns.

Much in the same way, Bruntwood’s work at Cornerblock has achieved excellent results with c. 30,000 sq ft secured this quarter and c. 70,000 sq ft let in 2017 so far.

CEG and Bruntwood’s ability to vary their leasing profile to grant more flexible leases on high quality space has set them above the competition.

alpha tower birmingham office market


Office space availability

The buildings currently available in a prime location, at Grade ‘A’ quality and offering the larger floorplates that are appealing to corporates, would be:

  • The Colmore Building
  • 55 Colmore Row
  • 1 Colmore Square
  • Baskerville House

Meanwhile, we have various developments in progress in Birmingham city centre that will provide the Birmingham office market with much needed new office stock, including:

Office buildingOffice space available (sq ft)
10 Temple Street (recently completed)25,000
Three Snowhill420,000
One & Two Chamberlain Square339,000
103 Colmore Row284,000
Post & Mail234,000

Few smaller deals in Q3

Q3 2017 saw significantly fewer transactions below 1,000 sq ft than we have come to expect in the market for Birmingham city centre office space – with only 4 deals under 1,000 sq ft. This could be due to reduced office stock at this size, that is of a high quality. Alternatively, given the number of lettings to serviced office operations in the past year or so, occupiers may be choosing serviced offices overtaking traditional leases in order to achieve the flexibility they need.

Office buildingOffice space (sq ft)OccupierBusiness sector
McLaren990Grid EdgeSoftware / TMT / Utilities
Livery Place922Port PIT services
White House646OpinstaSoftware / TMT / Rail
Cheltenham House245Sporting Group InternationalRecruitment / Sport


With the year to date currently standing at just over 650,000 sq ft, thanks to the HMRC consolidation, the Birmingham office market is now on track to achieve and exceed the long-term average of 700,000 sq ft – by how much remains to be seen.

It has recently been announced that the RICS has acquired 30,000 sq ft in 55 Colmore Row, which will feature in Q4’s take up, but KWB also understands that there are two substantial requirements of 80,000 and 50,000 sq ft, which could possibly complete in the final quarter. If they do, we could see the Birmingham office market achieve well over 800,000 sq ft in office space transactions for 2017.

2017 has lacked the volume of major consolidations that have helped to make recent years so successful for Birmingham office space transactions – though somewhat counteracted by HMRC’s pre-let. As we look to 2018, we would want to see a reappearance of such demands for space – particularly when considering the volume of new space under development as we speak.

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, please contact Mark Robinson on 0121 212 5994 or email

To register for future research updates, click here.