Slow start to 2025 for Birmingham Office Market
The Birmingham city centre office market has experienced a subdued start to 2025, according to the latest market report from commercial property consultancy, KWB.
The Q1 figures, forming part of KWB’s H1 2025 Birmingham Office Market Review, reveal a total take-up of 182,794 sq ft across 38 transactions – a significant drop on both the five- and ten-year averages, but one that KWB says must be viewed in context according to Malcolm Jones, Director of Office Agency at KWB.
He said: “After a record-breaking year in 2024, it’s not surprising to see some rebalancing. The absence of a single, large ‘landmark’ deal has skewed the data – just as previous years were positively distorted by those major lettings.”
Last year’s performance was lifted by high-profile transactions such as Aston University’s 189,053 sq ft deal at 10 Woodcock Street and the BBC’s relocation to Typhoo Wharf. In contrast, the largest city centre deal in the first quarter of 2025 was Covalt’s 27,000 sq ft letting at 1 Victoria Square, followed by Phoenix Life’s 25,107 sq ft move into 10 Brindleyplace.
While activity in some sectors has slowed, notably TMT (Technology, Media and Telecoms) and Education, professional services has accounted for 55 per cent of take-up with over 100,000 sq ft acquired across 21 deals in the first three months of 2025.
“The resilience of the professional services sector is a real positive,” added Malcolm. “CBRE’s move into 16,458 sq ft at Three Chamberlain Square and Turner & Townsend’s 10,177 sq ft deal at 55 Colmore Row show that firms are continuing to invest in high-quality space in prime locations.”
Another standout feature of the first half of the year has been the emergence of next generation serviced office providers. Operators like Gilbanks and Covalt secured some of the biggest lettings of H1, responding to demand for flexible, premium and ESG-compliant workspace.
The report also highlights that Colmore Business District remains the city’s leading business destination, accounting for 18 of the 38 city centre deals. However, with many of its best buildings now at or near capacity, the district is projected to fall short of its recent take-up highs – a sign of demand outpacing supply for Grade A office space.
Despite the quieter half year, the outlook remains positive for the second half of the year with deals such as 70,000 sq ft by EY, and the University of Birmingham’s 50,000 sq ft lease at Birmingham Health Innovation Campus on the edge of the city centre suggesting that momentum may pick up in H2.
“There’s no denying that wider economic uncertainty is influencing decision-making,” said Malcolm, “but with several high-quality office refurbishments and new builds nearing completion, we expect to see greater activity towards the end of the year.”
KWB’s report also notes that major regeneration schemes, such as Smithfield and the Digbeth Ironworks redevelopment, are likely to draw further investment and help drive future demand.
“Birmingham’s fundamentals remain strong,” he added. “What we’re seeing is an office market taking a breath after an exceptional year – but with clear signals of strength in key sectors and ongoing confidence in the city’s in Birmingham’s commercial potential.”
Read the full H1 2025 Birmingham Office Market Review.
