Office space Birmingham city centre – quarter 1 2014 take-up
Q1 2014 transactions for office space in Birmingham city centre painted a similar picture to that of Q1 last year, characteristically a quieter quarter with a focus on smaller transactions, albeit we had three transactions over 10,000 sq ft this year compared with just one last year.
There were 28 transactions for Birmingham office space, totalling 102,353 sq ft compared with 113,000 sq ft across 30 transactions last year. In terms of the number of transactions, Birmingham city centre core was the place to be with 60% of office space transactions. Edgbaston accounted for 6 transactions (22%) with fringe locations like Birmingham Jewellery Quarter still popular with 5 transactions (18%).
If we look at the transactions by business sector, property, recruitment and financial services featured prominently. In contrast, the legal sector has been relatively quiet in recent times but there may be further news from this sector later this year.
A marked increase in demand for office space in Edgbaston
However, there was a marked increase in demand for office space in Edgbaston with 37% of the transactions by square footage, including two over 10,000 sq ft, namely Healthtrust Europe and Perkins Slade. Arguably, offices in Edgbaston have found their level relative to office space in Birmingham city centre and are enjoying a resurgence in demand by retaining businesses rather than losing them to Birmingham city centre core, as was the case a few years ago.
Evidence of companies relocating into better quality and more efficient office space
Healthtrust Europe and Perkins Slade are also examples of companies relocating offices at lease end into better quality and more efficient office space. Cathedral Court continues to appeal to property/construction companies with the letting to Cundall Johnstone & Partners. There is also evidence of companies expanding, including Weightmans into the ground floor of St Philips Point, and Wesleyan into Colmore Gate.
Forthcoming large office lease breaks and expiries still to become evident
Even though there was a notable absence of large transactions for office space in Birmingham this quarter, we have commented previously on the number of large office lease events between now and 2018 that are not yet evident in the market. We are acutely aware of the number of occupiers who have initiated searches for office space in Birmingham above 20,000 sq ft and look forward to some movement on these later this year.
With notable large occupiers still mulling over their opportunities, the recent activity by PWC is good news. They have re-geared only the space they occupy in Cornwall Court as a 5-year medium term fix, a measure which allows them to assess the future market for Birmingham office space, including the Paradise development when there is more certainty in its delivery.
Birmingham’s Paradise Circus redevelopment can now move forward
The recent announcement of Birmingham Conservatoire’s plans to relocate to Eastside, with an architect designing a new purpose-built facility to be built alongside Millennium Point, means that Argent and Altitude Real Estate can really start in earnest to take the Paradise Circus redevelopment forward. Comprising ground floor retail and offices above, this will be the single, biggest, most notable scheme to dramatically improve and expand Birmingham city centre core and link it to Brindleyplace – since the development of Brindleyplace itself!
Incentive levels on Birmingham offices are steadily decreasing
Rental levels for Birmingham office space have not started to increase yet; they remain consistent as demand is stable. However, incentive levels are steadily decreasing, particularly on Grade ‘A’ office space, and are beginning to impact on refurbished office space as well. Prime office space in Birmingham has the potential for rental growth as major requirements become active.
See full details of the transactions for office space in Birmingham city centre and Edgbaston.
For more information, please contact Mark Robinson on 0121 212 5994 or email firstname.lastname@example.org.