M42 and Solihull office market research – quarter 3 2016

Q3 2016 delivers a healthy quarterly transactions total, putting the market for offices in Solihull and the M42 corridor back on track to achieve the annual long-term average. The summer also yielded a couple of surprises, with the out-of-town office market securing a higher total than Birmingham city centre, and the second largest letting of the quarter taking place in Redditch.

Highlights of Solihull office market research

  • Solihull and M42 corridor secure more square footage than Birmingham city centre
  • Redditch yields quarter’s second largest letting
  • Largest lettings of the quarter driven by office space consolidation
  • Diminishing availability of office space drives freehold market as occupiers seek security in their future occupancy and investors recognise opportunity

Out-of-town office market outperforms Birmingham city centre

The Solihull and M42 corridor office market secured a higher square footage of lettings than Birmingham city centre in Q3. Typically, the Birmingham office market achieves a quarterly transactions total in the region of double that of the out-of-town market. However, Q3 saw Birmingham city centre yield 95,546 sq ft – with Solihull and the M42 corridor achieving 96,921 sq ft.

Letting of 2920 Trident Court is consolidation driven

The largest letting of the quarter was 26,498 sq ft to an occupier who cannot yet be announced due to contractual reasons. However, the letting was the result of a consolidation drive by the company and acquisition took place whilst the property was in the process of being refurbished by the landlord. It is understood that the refurbishment has been well received by the occupier, as the building has been refurbished to a much higher level than simply being restored to the condition it was in 15 years ago.

The refurbishment of the property includes brand new M&E and washroom facilities – upgrades that will see the property become more energy efficient – as well as high quality specification fixtures and fittings. This comprehensive level of refurbishment is indicative of what landlords have undertaken in order to secure large, single occupier lettings for their vacant properties.

Out-of-town office market outperforms Birmingham city centre

Q3 delivered a healthy level of lettings over 10,000 sq ft. The four lettings in this size bracket amount to 58,934 sq ft – equating to 61% of square footage.

OfficeOccupierOffice space (sq ft)
2920 Trident CourtConfidential26,498
One Paper Mill DriveMWH11,952
2 FORE Business ParkTaylor Wimpey10,484
Aspen, Central BoulevardHill Hoffstetter10,000

Both Hill Hoffstetter and Taylor Wimpey’s lettings were purely lease event driven – whilst the letting of 2920 Trident Court and MWH’s taking of space at One Paper Mill Drive were office space consolidations.

Birmingham Business Park continues to pull in occupiers

The aforementioned letting at 2920 Trident Court represented the removal from the market of the best quality, vacant office building on the Park. BlackRock has undertaken a strategy of offering the remaining vacant offices at Birmingham Business Park at the best quality – with thorough refurbishments already having taken place or offered as part of lease negotiations.

The success that Birmingham Business Park has had in recent years has meant that only 10% of the Park is now vacant.

Birmingham Business Park’s continued appeal within the office market stems from its excellent proximity to road, rail and air travel transport links; as well as its status of being one of the few locations in the out-of-town office market that can provide the space that larger occupiers are looking for to house the consolidation or relocation of their workforces.

Redditch secures fourth largest out-of-town letting for the quarter

In perhaps the most surprising piece of news in Q3 2016, the second largest letting within Solihull and the M42 corridor was secured in Redditch – for, engineering specialists, MWH.

In 2012, Birmingham Business Park was securing around 10-15% of the out-of-town office market take-up, with offices in Redditch and offices in Bromsgrove collectively securing up to 30%. This ratio of prosperity for these two areas of the office markets has slowly swapped, in the intervening years.

Redditch and Bromsgrove office markets have been all but dormant for several successive quarters. This has been largely due to a severe lack of available office stock in these areas. Whilst enquiry levels for these areas remain strong, many occupiers are forced to seek offices closer to Birmingham.

However, in Q3 we see the letting of 11,952 sq ft of office space in Redditch to MWH. The company has taken space at One Paper Mill Drive and the transaction represents almost 10% of the square footage transacted in the quarter. The letting to MWH is the largest in the area for a long time. However, this letting is unlikely to be a sign of things to come for the office market in these areas, as supply remains minimal.

Q3 puts Solihull office market back on track for annual long-term average

The Solihull office market performed better than expected in Q3 2016 – putting the year-to-date total to 244,885 sq ft. In Q2, we had predicted that the market may fall short of achieving its long-term average, but given the results of Q3 we see it being now on target. We expect to see a slowing of the market being evident in the figures of Q4 2016, but clearly that won’t prevent the market for offices in Solihull and the M42 corridor from achieving in excess of 250,000 sq ft.

Strong level of freehold transactions for out-of-town office space

As demand for Solihull office space continues, and supply is driven down to extremely low levels – many companies are looking to secure a permanent office location. It’s also stimulated the investment markets with private buyers snapping up space throughout this year.

Q3 2016 out-of-town freehold office transactions:

OfficeOccupierOffice space (sq ft)
20-21 The CourtyardHydrajaws5,155
Unit 6 The PavilionsTouch Systems2,456
1 The CourtyardTIS2,434
Unit 1 Aston CourtConfidential2,297


A slowing rate of enquiries in light of Brexit uncertainty is expected to be apparent in the Q4 2016 transaction figures – we certainly don’t expect the market to achieve another 100,000 sq ft in the coming quarter. This will contrast with Birmingham city centre, which we anticipate having a bounce back of sorts with its Q4 2016 transaction figures.

Into the new year, as we have said in previous quarterly market research, we predict serviced office occupiers doing well throughout 2017, with small to medium-sized occupiers seeking flexible space following the outcome of Brexit.

See full details of the transactions featured in our M42 and Solihull office market research.

For more information, please contact Mark Robinson on 0121 212 5994 or email mrobinson@kwboffice.com.