Office space Solihull and M42 corridor – quarter 4 2012 take-up
Quarter 4 transactions for office space in Solihull and the M42 corridor brought the total for the full year 2012 to 325,699 sq ft, a 48% increase on the long term average for this area of c. 220,000 sq ft, and 58% up on 2011.
Indeed, this level of transactions for office space in Solihull and the M42 has been unseen since 2007, at the top of the market. The figure even excludes the land sale on Birmingham Business Park to Rolls Royce, which provides a further 125,000 sq ft of office space.
An interesting point to note is that, after several years of having available office space in Solihull, Blythe Valley Park is now 100% tenanted. However, there remain two tenant-led disposals from Centrica and Vodafone to market their surplus Solihull office space.
Increased inward investment – relocating offices into Solihull and M42
The office market seems to have experienced an increased level of inward investment from occupiers who have relocated their offices into Solihull and the M42 from other areas, most notably:
- Waterloo Housing from Tamworth
- Computacenter from Aston
- iTradeNetwork consolidating their High Wycombe and Burton-on-Trent offices
- Virgin Media consolidating all the Midlands satellite offices into one central hub at Eagle Court, and closing Brierley Hill and Redditch offices as a result
Larger corporates consolidating operations into more efficient M42 and Solihull office space
The average letting size for office space in Solihull and the M42 also increased, reflecting the fact that larger businesses are looking to consolidate and rationalise their operations, as well as the smaller companies. The 2011 average of 4,089 sq ft increased by 67% to 6,031 sq ft, albeit heavily skewed by the Virgin Media transaction, which was the largest letting of office space in Solihull and the M42 area for 5 years, since the Lafarge transaction at Trinity Park. For further information, see our news article ‘Virgin Media acquires Eagle 3 offices in Solihull’.
This was also the first 10-year lease to be taken in the market for 5 years, and was then replicated in the ArcelorMittal office space letting at FORE – see ‘KWB lets 8,900 sq ft of FORE offices in Solihull to ArcelorMittal’.
KWB involved in 47% of transactions for office space in Solihull and M42 corridor
In terms of the number of office space transactions, there were 54 in 2012, 7 more than the previous year. KWB was involved with 20 of these transactions, 37% by number or 47% by square footage, a total of 153,339 sq ft.
Looking through the list of occupiers, there is no one particular sector taking up the majority of the office space, or that the market is dependent upon. This demonstrates the strength in the region as a whole and shows that there is greater depth to the market in this area. The industrial sector locally has experienced good demand from the Jaguar Land Rover supply chain at locations like Fradley Park. However, Solihull and the M42 is yet to experience a significant level of office space take-up from the vibrant automotive sector.
Predictions for office space in 2013
From the office occupiers that we are currently talking to, we see a number of customers looking to move into the Solihull and M42 market. Clearly, the Plot 500 land sale at Birmingham Business Park to Rolls Royce is an expansion from their existing Hall Green facility and we anticipate there being additional demand from aviation-related companies on completion of the Birmingham Business Park facility in 2014.
Whilst it’s still early in 2013, KWB has already experienced a healthy level of new interest for office space in Solihull and the M42 corridor and has also completed their first acquisition of the year, acting on behalf of Morson Projects acquiring 3,600 sq ft at Park Square on Birmingham Business Park. We are also close to securing an 11,500 sq ft disposal of office space on Birmingham Business Park.
See full details of the transactions for office space in Solihull and M42 corridor.