Traditional leases on smaller offices still popular in Birmingham
Smaller offices once again formed the majority of transactions in the Birmingham office market in the second quarter of 2018, showing that small businesses remain highly active in the city, and are still keen to sign traditional leases, rather than take serviced office accommodation.
Ben Voss Wood of the office agency team at KWB’s Birmingham commercial property agents, says that almost two thirds (20/31) of the reported office lettings and sales were for less than 3,000 sq ft.
Ben said: “Despite the massive growth in serviced office space in Birmingham city centre of some 200,000 sq ft in 2017, and that 93,927 sq ft, 55% of the total space, was let to serviced office operators in the second quarter of 2018, many smaller occupiers still want to have their own space with their own front door, rather than take space in a larger, flexible office.
“As a result, it is still possible for landlords to get a good return on capital investment in refurbishing office buildings with smaller suites and offering them on traditional three to five-year leases.”
Guildhall Buildings, Birmingham
With five lettings to SLC Rail, SR Law Cognition Agency, Quantum Advisory and Hyperscale Group Guildhall Buildings on Navigation Street saw the most deals of any office building in Birmingham from April to June 2018, and is now 80% let.
Ben continued: “Oval Real Estate recognised Guildhall Buildings’ key location, opposite the main entrance to New Street station, and carried out a high quality comprehensive refurbishment of the office space, resulting in a very attractive proposition for smaller occupiers.”
According to Ben Voss Wood, cost and corporate presence are key factors in smaller occupiers wanting to take on traditional office leases: “Smaller organisations which have grown and matured in serviced office accommodation are taking lets on small office suites which are cheaper in the longer term, and which they can make their own.
“Although it is a longer commitment than the ‘easy in, easy out’ terms offered by serviced offices, rents on office suites can be around half as much as serviced offices.
“With their own front door, occupiers also have the opportunity to brand the exterior, fit-out the interior to match their corporate culture, and demonstrate a much more permanent presence to customers and staff alike.”
KWB is the letting agent for Guildhall Buildings, Cheltenham House, New Oxford House and a number of smaller office suites in Birmingham city centre, the Jewellery Quarter and Edgbaston.
Each quarter, KWB publishes research into the Birmingham office market, listing all the office transactions and providing its view of the current and future market. KWB’s complete Q2 research for Birmingham city centre can be found here, and for the full list of transactions click here.
For more information on the Birmingham office market, contact Ben Voss Wood or Malcolm Jones on 0121 233 2330 or email firstname.lastname@example.org or email@example.com.