Office space Solihull and M42 corridor – quarter 2 2014 take-up
After an extended period of considering their options for relocation and the ensuing lengthy approval process, a number of larger corporates have finally ‘signed on the dotted line’, resulting in Q2 2014 bringing, an incredible, 134,913 sq ft worth of transactions for offices in Solihull and the M42 corridor.
The three largest deals for office space in Solihull total just over 65,000 sq ft, substantially more than the area’s total transactions in the first quarter of this year. This all means that, at halfway through 2014, we have achieved almost 90% of the average long term annual take-up for office space in Solihull and the surrounding areas.
Strength to Strength: Solihull’s office and retail markets appear evergreen
The past 3 months have formed the largest quarter for two years, since Q1 2012, for office space take-up in Solihull and the M42 corridor. The out-of-town office market transactions, recorded during this quarter, are all the more astonishing when considering that they total 21,000 sq ft more than the amount transacted this quarter in Birmingham city centre.
Demand for office space in Solihull continues to grow, and the borough currently boasts the fifth highest GDP in the country. This prosperity is evident on Solihull’s high street which, according to widely documented reports and statistics, was unaffected by the recession and enjoyed record low levels of vacancy in retail property due to undiminished footfall.
The largest transactions this quarter come from UTC and Pinewood Technology.
Aerospace giant, UTC, combined two offices in Shirley to occupy the whole of FORE 1, 25,749 sq ft within the only BREEAM ‘Excellent’ offices in Solihull and the last speculatively developed office scheme to complete in the M42 office market. Relocating their offices from short term, managed offices at Blythe Valley Park, software provider eTech, also signed a 10 year lease on the whole of the first floor within FORE 2, comprising 10,484 sq ft, further evidence of increasing certainty of future business prospects.
Pinewood Technology, meanwhile, moved to offices at Birmingham Business Park. Following the expiry of a 15-year lease, the software developer, which specialises in the automotive sector, has signed the lease on 22,174 sq ft of more modern office space at Trident Court.
It is a similar picture for Steria, one of the top 10 IT service companies in Europe, who, upon the expiry of a 15-year office lease, has signed a lease at T3 Trinity Park offices next to Birmingham Airport. This has enabled Steria to combine three floors into a single floorplate comprising 17,166 sq ft of much more efficient office space.
IM properties come to the FORE
With FORE seen as a benchmark for the upper end of the office market in Solihull, it is unsurprising that only one floor now remains available, and with two potential occupiers currently looking at it. The recent announcement of BAM selling Fore Business Park to Coleshill’s IM Properties for £21m is further testimony to its success.
The site at FORE includes six acres of development land, with planning secured for two further office buildings totalling an additional 90,000 sq ft. Martin Hill, Development Director for BAM Properties, said: “It speaks volumes about the strength of the M42 market that IM Properties has chosen to take the whole of the FORE business park development.”
Following the purchase by IM Properties, KWB has been re-retained as leasing agents and will be advising on the Phase 2 development at FORE offices, Solihull.
Business Back for BBP
Birmingham Business Park, the most established business park in the region, has seen 6 deals over this last quarter, comprising nearly 45,000 sq ft or a third of the total office space transacted in the quarter.
This is in line with our predictions at the end of last year, for a huge resurgence of demand for office space at Birmingham Business Park. With large transactions now materialising, such as the aforementioned Pinewood Technology office relocation, the level of oversupply at the Park has been eroded, particularly in the 10,000+ sq ft office market.
Availability of larger Solihull office space is drying up
These larger transactions for offices in Solihull are set to continue, with a couple of large signings, to the tune of 60,000 sq ft, expected to complete later this year. Activity such as this indicates that the corporate market has re-awakened, and is now doing rather well, after a period of relative inactivity. The result of this, as predicted, is a notable absence of options now for office space in Solihull over 10,000 sq ft and the balance of power swinging back to the landlord. We would anticipate only another 12 months’ of Solihull office lettings before we become uncomfortably ‘out of stock’.
Capacity conundrum: popularity of Redditch and Bromsgrove office space results in shortage of supply
Offices in Redditch and Bromsgrove still remain popular but here also the lack of supply of office space is becoming more pronounced. For example, Topaz, the attractive courtyard headquarter office scheme in Bromsgrove, is almost fully let with the last remaining unit now under offer. The scheme, which was developed by Maximus, consistently attracted office occupiers throughout the recession due to its quality of build and excellent motorway connections. Aston Court technology Park is of a similar vein.
KWB completed 64% of transactions for office space in Solihull and the M42 corridor
KWB completed twelve of the twenty-two transactions in the quarter, nearly 86,000 sq ft and 64% of the total square footage. This included three of the top four over 10,000 sq ft deals, comprising UTC, Steria and eTech.
KWB has consolidated and extended its first quarter performance in the out-of-town Solihull office market by now achieving over 120,000 sq ft and 62% of the first half deals by square footage, or 20 of the 40 deals in total.
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.