Office space Birmingham city centre – quarter 2 2014 take-up
In Q2, transactions for office space in Birmingham totalled 113,741 sq ft, with 35 transactions and an average size of 3,250 sq ft per transaction.
When we look into these figures and the information within the market place, the following are noteworthy:
Increasing investment – An eye to the future for Birmingham office deals
Whilst this quarter’s performance clearly still puts the Birmingham office market tracking below the five-year annual average of 650,000 sq ft per annum, Q2 was up on last quarter and, if you remove the skew of the Deutschebank deal in Q2 2013, was up on the same quarter last year. There were also three individual office space transactions over 10,000 sq ft.
However, we also know that several notable Birmingham office space requirements have recently been issued to the market, which will complete either later this year or early 2015. This evidence of increasing investment in Birmingham city centre is slow to come to fruition due to the larger corporates now taking extended periods of time to consider their opportunities for office relocation and to complete their due diligence. Indeed the huge announcement of, high speed rail company, HS2 taking a 15 year long-term lease of 100,000 sq ft at Two Snowhill at the beginning of Q3 is a prime example of bigger deals to come. The transaction also puts Birmingham on the right track to hit, and perhaps surpass, annual targets in the commercial property sector.
Finance and recruitment on the ‘Up’
A clear trend of financial and recruitment companies taking up office space in Birmingham indicates a positive direction for both financial growth and employment. Whilst the activity amongst recruitment companies, five this quarter, continues a trend highlighted towards the end of last year, financial services is now gathering pace, albeit at the smaller end of office transactions.
Finance-related occupiers, like Bibby Financial Services and Equistone, have relocated into better quality Birmingham offices, such as 170 Edmund Street and Bank House, with the latter continuing to be popular with companies and now reaching full occupancy.
Property-related occupier, URS, is another good example of a company progressing to better quality office space. Having started in Alpha Tower, and then relocating to McLaren, this quarter they have moved their offices to Victoria Square House, a prime located building right in the centre of Birmingham.
CBRE’s Birmingham office relocation will benefit their future business
Property was also an active sector, with one of the largest transactions of the quarter being CBRE commercial property agents’ Birmingham office relocation to 55 Temple Row. CBRE has moved from Cornwall Court into 13,500 sq ft of office space facing the green of St Phillips Cathedral. With the office space currently in the throes of refurbishment, this is one of the most high profile office buildings in the market and will no doubt benefit their commercial property business in the future.
‘BCU Boom’ – University continues to grow and with it so does Birmingham’s talent pool
The impressive growth of Birmingham City University is demonstrated heavily by two transactions this quarter, with their take up in this period totalling almost 35,000 sq ft. This includes 7,000 sq ft at Millennium Point and 27,506 sq ft at the nearby NTI Birmingham building (New Technology Institute) to form the university’s digital postgraduate department. Specialising in areas such as gaming, media, film and digital marketing, a centre of this type and size indicates a wealth of creative talent gravitating to Birmingham.
‘SMEs Bloom’ – Smaller businesses set the trend with healthy circulation and uptake in sub 3,000 sq ft Birmingham office market
With many deals taking place in the sub 3,000 sq ft office market sector, we can see that SMEs and micro businesses are doing well and actively quite busy. This has fuelled transactions in Birmingham city centre core this quarter, which boasted a massive 74% of the office space deals in number, compared with 60% last quarter and 66% last year.
This is another great demonstration of the aforementioned growth and steadily increasing levels of investment across the business sector within Birmingham city centre.
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.