Office space Solihull and M42 corridor – quarter 1 2015 take-up
Such is the pipeline of significant enquiries for office space in Solihull and the M42 corridor, that a relatively uneventful Q1 start to the year can only signify that Q2 is likely to be a bumper quarter for Birmingham’s out-of-town office market.
Expansion of office space today will drive consolidation of offices in the future
A good number of the deals in this quarter’s figures, which totalled 28,600 sq ft across 11 transactions, are occupiers taking additional office space, expanding to accommodate new staff as business confidence grows in an economy ‘on the up’.
- In the largest deal of the quarter, business support organisation Entrepreneurs Circle doubled their office space at 2635 Kings Court on Birmingham Business Park, by taking an additional 5,671 sq ft.
- Financial advisers, Ernest Grant, expanded into another 3,500 sq ft at Friars Gate offices in Shirley.
- Secure Trust Bank occupied a further 3,121 sq ft at 4 Arleston Way in the Cranmore area of Shirley.
- UK Power Reserve, the UK’s leading independent developer and operator of smart, flexible power generation, took a further 2,927 sq ft at Radcliffe House offices in Solihull town centre.
- VINCI Construction took another floor of 1,578 sq ft at 2040 The Crescent, Birmingham Business Park.
Whilst last year we were seeing deals driven by lease events, in more recent times it is the improved trading conditions and companies actively recruiting that are now driving the need to expand.
These incremental expansions by the small to medium sized companies are in contrast to the larger corporates who have been consolidating. This does mean that if SMEs continue to perform well and staff up with medium term expansions, then they too, in turn, will look to consolidate in the longer term into larger buildings or single floors.
Supply of office space in Solihull becoming limited – Birmingham Business Park will benefit
With increased demand across the board and larger office space requirements in the market, supply in the area is beginning to appear quite limited. At junction 4 of the M42 in Shirley, whilst there is some ‘grey space’, i.e. corporate subletting space available at Blythe Valley Business Park, landlord-led space is already very limited.
As a result, we expect Birmingham Business Park at junction 6 to continue to perform well, as occupiers requiring immediate space will focus on what’s actually available.
Companies that do not have a formal property department proactively managing their property holdings and looking at their requirements in advance – and by this we mean 12-24 months’ notice, are understandably preoccupied with the ‘day job’, thus leaving their property issues to play ‘catch-up’.
As supply tightens, there will be pressure from landlords to reduce incentives, and we expect quoting rents to increase where buildings have been refurbished.
Longevity of M&E systems a hot topic with larger occupiers
Larger occupiers who are seeking office space in Solihull and the M42 corridor are becoming more concerned regarding the longevity of M&E systems, demanding that it matches the length of lease that they are signing. They are much happier to sign a lease if the building services have been improved, otherwise they will seek an early break in the lease or severely limit their repairing liability.
As a result, refurbishment in this area, particularly of larger properties, is paramount to achieving a letting. It will set you above the competition and enable you to secure an increased rent and a longer lease.
All is quiet in Bromsgrove and Redditch – but demand is not to blame
Outside of the immediate Solihull area, the only deal signed in Q1 was 4,545 sq ft taken by DRB Facilities Management at 5 The Courtyard offices in Bromsgrove.
Lack of office space being taken up in Redditch and Bromsgrove this quarter is more attributable to the shortage of office space available in these areas, or at least that of a decent quality. This follows on from our highlighting of demand for both new offices and the refurbishment of secondary office space in these areas.
See full details of the transactions for office space in Solihull and M42 corridor.
For more information, please contact Mark Robinson on 0121 212 5994 or email firstname.lastname@example.org.