Smaller offices once again formed the majority of transactions in the Birmingham office market in 2018, showing that small businesses remain highly active in Birmingham city centre, and are still keen to sign traditional leases, rather than take serviced office space.
Malcolm Jones, Head of Office Agency at KWB Birmingham commercial property agents, highlights that more than half (54%) of the reported office lettings and sales in 2018 were for 3,000 sq ft or less (52% in 2017).
Writing in KWB’s 2018 Birmingham office market research, Malcolm said: “Despite the massive boost in serviced office space in Birmingham city centre of 215,316 sq ft in 2018, following 200,000 sq ft in 2017, many smaller occupiers still want to have their own space with their own front door, rather than take space in a larger flexible office.
“For the mature businesses that can more accurately predict their office space mid-term and long-term needs, a traditional lease can be much more appealing. After all, serviced office space can prove to be as much as double or possibly three times more expensive per square foot than traditional office space.”
“Offices on traditional leases can also provide the opportunity to brand the exterior, fit-out the interior to match corporate culture, and demonstrate a much more permanent presence to customers and staff alike.”
Guildhall Buildings on Navigation Street, on which KWB is instructed, has been particularly successful in letting small office suites in 2018, and is now 95% let.
Malcolm said: “Oval Real Estate recognised Guildhall Buildings’ key location, opposite the main entrance to Birmingham New Street Station, and carried out a high quality comprehensive refurbishment of the office space, resulting in a very attractive proposition for smaller occupiers.
“It is still possible for commercial property landlords to get a good return on capital investment, this year. By refurbishing office buildings with smaller suites, and offering them on traditional three to five-year leases, landlords will secure lettings.”
Each quarter, KWB publishes research on the Birmingham office market, analysing office transactions and providing insights into the current and future office market. For the full list of office transactions in 2018, click here.