Office space Birmingham city centre – quarter 2 2012 take-up
The latest figures for occupiers acquiring office space in Birmingham city centre show that, whilst take-up is 71% up on last quarter, it is still about half the level of square footage that we would normally expect for an average quarter. 35 office space transactions have been completed, with an average of 2,659 sq ft per transaction.
With regard to the quarter 2 statistics, which are collated by the Birmingham Office Market Forum, Birmingham city centre core remains the key focus for larger office occupiers but with clearly less office space transactions than in the fringe locations. The fringe locations, like Birmingham Science Park in Aston and Birmingham’s Jewellery Quarter, make up for it in sheer volume of office space transactions relative to Birmingham city centre. These office locations, particularly the Jewellery Quarter, remain active in the sub 3,000 sq ft office market.
Edgbaston offices top the league table
The most notable two office space transactions this quarter comprise:
- Clement Keys with 14,600 sq ft in 8 Calthorpe Road, formerly Calthorpe House and also home to The Binding Site
- Autism West Midlands with 8,300 sq ft in Regent Court offices in Edgbaston
The last 6 months have been very quiet for offices in Edgbaston, with limited office space transactions over 5,000 sq ft. Whilst only 2 transactions, it shows that mid-size occupiers still want to base themselves in Edgbaston offices. In previous quarters, there has been a net migration of office occupiers out of Edgbaston towards Birmingham city centre. It will be interesting to see, with the opening of the new Morrisons store, whether Edgbaston offices will retain occupiers who have been frustrated historically by the lack of local amenities.
Birmingham Science Park – first speculative development of offices in Birmingham for 4 years
This quarter, there are also 11 office lettings on Birmingham Science Park in Aston, each below 1,000 sq ft and largely to IT and media companies. Proof of the demand that the area is encouraging is the appointment of a new joint venture partner, Thomas Vale, who will start work on iCentrum, 30,000 sq ft and the first speculative development of offices in Birmingham city centre since 2008. This is also the first building within the £35m Digital Plaza, which will provide120,00 sq ft of offices and R&D space in four buildings.
Offices in Birmingham city centre core looking to the year end for uplift
We expect companies with larger office space requirements to start viewing properties towards the end of quarter 3/beginning of quarter 4 because of the number of significant office lease breaks and lease expiries in Birmingham in 2014. There is 225,000 sq ft of named occupational demand actively searching for Birmingham office space but yet to identify a final opportunity, which may be forthcoming by the end of the year.
With only Two Snowhill under construction, opportunities for larger office occupiers to move forward will be limited. If occupiers are unable to use their existing office space, they may be forced to look at pre-letting opportunities.
The refurbished second hand market remains competitive.
Commercial property agents remain active as viewings are being made, but occupiers’ decision making is taking much longer. Many office occupiers have looked at commercial property historically but deferred any decisions as they still had time remaining on their office lease. However, as time diminishes until this event date, some office occupiers are being forced to review their options again.
Occupiers need to plan their office relocation at least 15-18 months in advance
Office occupiers wanting in excess of 3,000 sq ft need to start looking at least 15-18 months prior to their lease event to understand the market characteristics, evaluate their options and compare office relocation costs with remaining in their existing office space. Whilst this may seem too long a period, it allows occupiers to give themselves the best possible opportunity to obtain terms in their favour. If they leave it too late, they will be hamstrung by the limited amount of time to negotiate the office space transaction fully.
See full details of the transactions for office space in Birmingham city centre and Edgbaston.