M42 and Solihull office market research — Quarter 1 2022
A strong first quarter for the Solihull office market was topped by the largest Birmingham Business Park letting in over two decades, to an unnamed government department.
The Solihull office market achieved 85,183 sq ft across 11 office space transactions with a good geographical spread. The largest deal was a landmark government transaction of 37,509 sq ft at 3010 & 3020 The Crescent on Birmingham Business Park.
Q1 2022 stats
8 5 , 1 8 3
total take-up (sq ft)
3 7 , 5 0 9
largest transaction (sq ft)
M42/Solihull office market Q1 take-up (sq ft)
Solihull office market at a glance
- Key transactions – over 7,000 sq ft
- Government takes largest BBP space for 22 years – 3010 & 3020 The Crescent snapped up
- Trinity Park heating up with Boparan – restaurant group takes space to train
- Two outings for Bromsgrove – lettings in Bromsgrove, but Redditch stays quiet
- ArcelorMittal moves to Friars Gate – steel manufacturer relocates from Fore
- All smiles as Align expands – dental device company takes 2800’s last remaining suite
- Lack of availability – low supply sending occupiers elsewhere
- Outlook – occupiers with unutilised office space could consider subletting
|Office building||Size (sq ft)||Occupier||Business sector|
|3010 & 3020 The Crescent||37,509||Unnamed government department||Government|
|Building 300, Trinity Park||8,685||Boparan Restaurants||Food & drink|
|2800 The Crescent||8,401||Align Technology||Orthodontic manufacturing|
|Friars Gate||7,060||ArcelorMittal||Steel producer|
|Total||61,655||72% of take-up across 4 transactions|
Government takes largest BBP space for 22 years
A currently unnamed government department was responsible for the largest letting at Birmingham Business Park in more than two decades, taking a total of 37,509 sq ft of office space across the two buildings of 3010 & 3020 The Crescent. These two self-contained office buildings are sized 22,235 sq ft and 15,274 sq ft respectively.
The scale of this transaction is also underlined by the rare occurrence of the largest letting in Birmingham’s out of town office market exceeding that of the city centre. The largest deal in Q1 2022 for the Birmingham office market was to another government department, The Office of the Public Guardian, which took 27,132 sq ft at Victoria Square House.
Birmingham has seen a string of substantial deals to government departments over recent years, with a programme of consolidation to combine multiple smaller offices into single larger bases. The benefits of doing this are many, and centre around improving efficiencies such as cost, operations, energy usage, communication and productivity – to name a few. Whilst the identity of the department is yet to be announced, it is likely that the motivations are similar to these listed.
This take-up also erodes Birmingham Business Park’s availability, with no options of this size of office space currently remaining.
Trinity Park heating up with Boparan
Birmingham-based restaurant group, Boparan – responsible for brands such as Ed’s Diner, Café Carluccio’s and Giraffe – took 8,685 sq ft at Building 300, Trinity Park in the second largest deal of the quarter. The business is expected to use at least part of the space to establish a Midlands training hub for its staff as it continues to expand.
Following a successful trial at Sainsbury’s Selly Oak store in Birmingham, the group has recently announced plans to open 30 of its new Restaurant Hubs within Sainsbury’s supermarkets over the next 12 months, offering customers eat-in, takeaway and home delivery from a range of its brands.
Two outings for Bromsgrove
Redditch and Bromsgrove are key locations for occupiers looking to be close to the M42. Office space in these towns benefits from excellent transport infrastructure, yet they are significantly more cost effective than Solihull and its major business parks. However, office stock is low and so lettings have been thin on the ground in recent years. Space that is brought to market following office refurbishment is usually let quickly.
In Q1 2022, Bromsgrove delivered two deals totalling 7,220 sq ft. The larger of the lettings was to Clay Knox accountants, which expanded at its offices within St Johns House – doubling in size by taking the second floor of 5,925 sq ft and now occupying the whole building of 11,850 sq ft. The second Bromsgrove letting was to accountancy firm, Cognitor Accountancy, which took 1,295 sq ft at 12 The Courtyard.
ArcelorMittal moves to Friars Gate
Steel and mining giant, ArcelorMittal took 7,060 sq ft of new office space at Friars Gate for its 50-strong team currently based at Fore. The relocation to Friars Gate was driven by the desire to achieve greater occupational efficiency in line with ArcelorMittal’s agile working and commitment to the environment.
The transaction represents not just a relocation but a downsizing of office stake too. Karen Reading, Company Secretary at ArcelorMittal, said: “Our lease at Fore Business Park is coming to an end, giving us the opportunity to acquire a smaller office space that reflects our changing needs. The Solihull branch mainly comprises sales and account management staff, who split their time between the offices and visiting customers. Digitalisation also means we need less storage space.
“Friars Gate suits us perfectly as it’s in a convenient location with on-site parking and will bring greater energy and cost efficiencies.”
The space was secured on behalf of ArcelorMittal by KWB. John Bryce, Director of KWB, said: “Friars Gate perfectly matches their requirements, given the Grade A quality accommodation, proximity to the motorway network and accessibility of local amenities.”
All smiles as Align expands
In the third largest letting of the quarter, orthodontic manufacturing specialists, Align Technology took 8,401 sq ft at 2800 The Crescent on Birmingham Business Park. The business specialises in manufacturing the well-known Invisalign system of corrective dental devices and 3D digital scanning technology.
The deal represents an expansion for the business within the building, having taken 13,356 sq ft at 2800 The Crescent in 2018. The space taken was 2800’s last remaining suite in the building meaning it is now fully let – with Align’s stake totalling 21,757 sq ft.
Lack of availability
Office space in Solihull and the M42 corridor remains in short supply, particularly that of a high quality. At the same time, such space is in extremely high demand. This issue is so acute that, as we have said previously, when an occupier vacates their space or moves into smaller offices, they are freeing up a new, rare opportunity for another occupier to take space.
Most space that does become available, however, tends to be at the smaller end of the market. Occupiers of larger space around the M42 will do their utmost to hold onto their existing offices, as most would struggle to find a suitable or preferable alternative nearby. In this way, out-of-town supply is not being released at a rate – and of the size and quality – to meet demand. Indeed, there are currently quite a few requirements in the marketplace for 10,000-15,000 sq ft and, with a genuine shortage of stock, the market will struggle to fulfil these.
If an occupier cannot find the office space they need in the M42 corridor in a timely fashion, they face a conundrum – where to go? Ultimately, they will need to consider other areas – such as Coventry or business parks in Warwickshire, for example.
An alternative is to head from out-of-town, into town and – though rare so far for Birmingham city centre – we’ve seen examples of this. In Q3 2021, Arup signed up for 68,479 sq ft at One Centenary Way in Birmingham city centre, in a relocation from offices at Solihull’s Blythe Valley Business Park set to take place in Spring 2023.
In the meantime, HS2 and transport infrastructure improvements continue at pace, with the latest announcement of £56 million to deliver phase two of the Sprint bus priority corridor along the full route between Solihull and Walsall. Sprint funding provides improved bus access, and funding for design work with a new M42 bridge and the Damson Parkway highway improvements, as well as improved cycling and walking links to HS2 Interchange Station.
Outlook for the M42 and Solihull office market
The outlook for the M42/Solihull office market is positive, despite low availability of office stock, which continues to hold back the market. In this environment, the rental value that can be commanded by high quality office stock is increasing and that should motivate landlords with lower quality stock to refurbish. Solihull office occupiers with unutilised office space can also play a part here – through sublets, for example – and should consider such options.
As said previously, there are several enquiries in the market for 10,000-15,000 sq ft and it is hard to imagine that they will all manage to find space. We would encourage landlords and occupiers that are not using all their office space to get in touch to discuss opportunities for their space in the market.
See full details of the transactions featured in our M42 and Solihull office market research.
For more information, please contact Malcolm Jones on 0121 233 2330 or email email@example.com.
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