Market snapshot

Office Market Pulse Birmingham Q3 2014

Q3 has seen continued improvement in office take-up for Birmingham with a total of 156,202 sq ft transacted; a 37% increase on Q2. We have seen sustained growth since the start of the year and with further significant deals in the pipeline, and the anticipated increase in demand for office space thanks to continued inward investment, the outlook is certainly positive as the year draws to a close.

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In this issue:

Continued improvement for Birmingham office take-up

  • Q3 saw continued improvement in office take-up with a total of 156,202 sq ft transacted; a 37% increase on Q2 (113,741 sq ft).
  • Added to the 63 deals from Q1 and Q2 totaling 216,094 sq ft, the year to date total stands at 372,296 sq ft (107 deals).
  • There were 26% more deals transacted in Q3 (44 new leases) compared to Q2 (35).
  • Average transaction size in Q3 was 3,550 sq ft which is in line with the long-term Birmingham average.

For an annual comparison of take-up click here.

Significant occupational transactions Q3 2014

 Property Size (sq ft) Landlord(s) Tenant /Purchaser Lease information
Colmore Plaza 23,000 Carlyle Vodafone 10 year lease with break option at year 5 and 7, circa £27.00 per sq ft
Quay Place 21,000 Threadneedle Office for Legal Complaints 10 year lease with break option at year 5, £12.00 per sq ft
2 Broadway 11,500 Mapeley Valuation Office Agency

7 year sub lease, £14.50 per sq ft

 

Acute scarcity of grade A office space continues

  • The acute scarcity of grade A office space continues, both in terms of new build and refurbished stock with just 12% remaining in current supply.
  • This pressure on supply is set to worsen with a number of larger transactions in the pipeline.
  • As choice becomes increasingly limited for occupiers, we expect landlords to continue to reduce incentive packages and hold out for stronger headline rents.
  • However, there are a number of outline planning consents in the city centre which will serve to address increasing occupier demand in the medium-term.

For a breakdown of current supply by grade, click here.

The regions overtake London

Investment in the UK commercial property sector during the third quarter of 2014 reached £16.3bn - a 37% increase on the previous quarter and 41% higher than in the corresponding period last year.

To view our latest UK Investment Transactions (UKIT) report, please click here.

 

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Alex Tross birmingham commercial property consultant office agency
Alex Tross

0121 237 2307

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Alex Tross
Director - Head of Office Agency - Birmingham.

0121 237 2307

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