Plans to convert nearly 22.5% of Solihull office space in the town centre to residential use will increase rents and benefit existing office landlords.
Former office properties, such as Sapphire House, Princes Gate (pictured here) and Warwick House, are either to be converted or already have been. Nigel Tripp, Director of KWB Birmingham commercial property agents, has established that 200,000 sq ft of office space has been, or is to be, converted to residential space in Solihull town centre.
Nigel said: “This represents a significant downsizing of Grade ‘A’ and ‘AB’ office stock by some 22.5%, and with no new build office space underway, or planned for the foreseeable future, this will provide a further upwards impetus to rents, which we expect to grow from their present headline figure of £22.50 per sq ft.
“Landlords who retain their office buildings can expect to reap the benefits, especially with the current shortage of available space.
“The vacancy rate in Solihull town centre offices presently stands at 8.5%, but if you remove the space which is under offer, and that which requires major refurbishment of at least six months, it is actually just 3%. It’s no wonder that an increasing number of occupiers are instructing us to search for, and acquire, office space on their behalf.
“The only option now for occupiers seeking a substantial headquarters building, of 40,000 sq ft and above, in Solihull town centre, is to look to a potential design and build option. However, with current land values and the ever increasing cost of building, they would have to pay around £25 per sq ft for the development to stack up.”
Each quarter, KWB produces comprehensive M42 and Solihull office market research, listing all the latest office transactions and providing its view of the current and future market. Further details about the current research can be found here.
For more information on the Birmingham and Solihull office markets, contact Nigel Tripp on 0121 233 2330 or via email firstname.lastname@example.org.