Birmingham’s office market continues to perform well as the city maintains a post-Covid bounce exceeding 10-year average take up by 41 per cent totaling 376,000 sq ft - according to strategic real estate advisor Avison Young’s latest Big Nine office market report.
The quality of the office space is an area of focus for Birmingham, as it ranks first for cities outside ofLondon for demand of Grade A property - accounting for 85 per cent of activity.
Hosting two of the largest deals outside of London, Birmingham has had strong individual development wins throughout Q3. Aviva Investors sold Colmore Gate for £39.5m, ranking as the fourth largest investment deal outside of London throughout the quarter. It also saw the third-largest occupier deal outside of London with engineering consultancy, Arup, taking 68,479sq ft at One Centenary Way, part of phase two of the wider scale Paradise development.
City centre take-up in Birmingham amounted to 242,901sq ft in Q3, 16 per cent growth on Q2 take up which amounted to 203,499 sq ft.
Workspace providers are capitalising on occupiers’ increased desire for flexibility. New entrant to Birmingham, X+why, has committed to management agreements on 34,500 sq ft at 103 Colmore Row and 40,616 sq ft at 6 Brindleyplace, which was vacated by WeWork. They will be joined by recently merged wealth management firm Tilney Smith Williamson, 12,000 sq ft, at 103 Colmore Row.
Carl Potter, Principal and Managing Director of the Birmingham Office at Avison Young, said:
“Birmingham continues the upward trajectory we have started to see develop throughout 2021 as Coronavirus restrictions ease and people have been returning to the office.
“The city has managed to maintain the bearing of a bigger performance in Q3, expanding on the promising activity experienced in Q2. With further deals in the pipeline and the great work taking place in areas such as Colmore Row and Paradise, I'm confident Q4 will show continuing confidence.”
With 2.3m sq ft of office space in the UK currently under construction, Birmingham remains a strong representation of this and an area of growth, ranking third for percentage of space let whilst under construction at 15 per cent, behind Manchester (26 per cent) and Glasgow (23 per cent).
The report also boasts a strong out-of-town market for the city, headlined by Mitie taking 32,848 sq ft at T2 Trinity Park and flexible workspace provider Chadwick Business Centres taking 14,952 sq ft at Blenheim Court, Solihull. There were also three 5,000 sq ft to 10,000 sq ft deals at Birmingham Business Park to Galliford Try, Imtech Environ and Morrison Energy.
Charles Toogood, Principal and Managing Director, National Offices Team at Avison Young, said:
“Avison Young’s latest Q3 Big Nine office market report yet again paints a positive picture for Birmingham as a city in recovery and that is something we expect to see continue. The forecast increase of Grade A supply is coming to fruition, giving occupiers increasing choice in a market more demanding than ever.
“An area of notable excitement with this is MEPC’s major development of One Centenary Way which is due for completion during December 2022 and proving a development to watch moving into the New Year.
“As we look forward to the end of the year and beyond, Birmingham remains in good stead with other cities looking towards office life post-pandemic - whether that be hybrid or a little closer to what we knew pre-lockdown.”
To read the full research update on Big Nine office markets (Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, Manchester and Newcastle) please visit https://www.avisonyoung.co.uk/the-big-nine/q3-2021.
Cllr Ian Ward, Council Leader at Birmingham City Council added:
"This incredibly positive news clearly illustrates that Birmingham continues to be a city on the up and underlines our burgeoning reputation as a desirable place for businesses to locate to.
"Prior to Covid, we were seeing growth at almost twice the rate of London, and four times the national average. And, while the pandemic has had a profound impact, the factors that made Birmingham such an attractive place to live, work and invest back in early 2020 remain in place and will now help power our recovery."