Office space Solihull and the M42 corridor – quarter 1 2016 research
Lack of supply, an eager 2015 market and the economic uncertainty of Brexit produced a very modest quarter for offices in Solihull and the M42 corridor. However, the dip in new enquiries and larger office lettings will give way after 23rd June – and developers may respond by introducing new space to the market.
For the third year running, Q1’s a quiet one
2015 showed a great correlation of proportionate activity between Birmingham’s city centre and the out-of-town office market. However, the level of office market activity for Birmingham city centre in Q1 2016 is not reflected by areas such as Solihull and the M42 corridor.
The 14 Q1 transactions for office space in Solihull totalled 45,562 sq ft, with an average transaction size of 3,040 sq ft. Although 2016 achieved far higher than Q1 2015’s 25,897 sq ft, the first quarters of 2016, 2015 and 2014, have all proven to be slow, and topped by a letting of less than 10,000 sq ft. This looks as if it could become a fairly standard pattern for the out-of-town office market – and certainly not something to raise concern.
Marel’s pre-let at 2020 The Crescent
Icelandic food processing equipment manufacturer, Marel, has secured 6,638 sq ft of space at 2020 The Crescent on Birmingham Business Park – the largest transaction of the quarter. The property is now set to be refurbished to a high standard, in order to welcome its new occupier. The second and third largest lettings were both secured at Blythe Valley Business Park – transport solutions provider Zenith took 5,493 sq ft at One Central Boulevard and packaging company, DS Smith, took 5,327 sq ft at Cornwall House.
A quiet quarter from the corporates, but larger deals lie ahead
Larger transactions for Solihull office space were absent from the Q1 figures – but sizeable requirements are in the marketplace. There are currently at least 3 or 4 enquiries of 20-30,000 sq ft which are expected to be fulfilled in the coming months. Property decisions can often be put off in the run up to events such as an election or a referendum, and the upcoming vote on the EU and the economic uncertainty surrounding the possibility of Brexit is a prime example.
Mark Robinson, KWB Director, said: “We are currently dealing with several larger office enquiries for the area, which have been in the market for some time. Whilst we hope to secure them within Q2, it may be that Brexit-cautious SMEs could push signings into the second half of the year.
“The feeling within the UK office market, is that lack of activity, particularly from occupiers who operate internationally, is due to the approaching EU referendum on 23rd June. We are confident that, once this has taken place, enquiries will pick up and leases will be signed.”