Market snapshot

Office Market Pulse Birmingham Q4 2014

The Birmingham office market saw a stellar end to 2014 with a Q4 take-up figure of 341,164 sq ft; almost the combined total take-up of all three previous quarters.

The 100,000 sq ft letting to HS2 at Two Snowhill was the year’s biggest transaction by some margin and provided a fitting end to a year that saw quarter on quarter growth.

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In this issue:

Birmingham sees best office take-up in six years

  • Q4 saw a 118% increase on the previous quarter with total office take-up of 341,164 sq ft.
  • Even without the HS2 letting (100,000 sq ft) the increase in take-up would have been 56% greater than Q3.
  • A total of 41 deals were transacted, just three down from Q3.
  • Average deal size was 8,300 sq ft; over double that of Q3 and the long-term average.

For an annual comparison of take-up click here.

Significant occupational transactions Q4 2014

 Property Size (sq ft) Landlord(s) Tenant /Purchaser Lease information
Two Snowhill 97,858 Hines HS2 15 year lease with a break option at year 10
£29.00 per sq ft
120 Edmund St 37,530 M&G HSBC 10 year lease with break option at year 5
£21.00 per sq ft

Two Snowhill

 

24,307

 

Wragge Lawrence Graham & Co

 

BDO

 

13 year straight sub lease
£30.00 per sq ft

 

 

Strength in demand a catalyst for speculative development

  • With continued scarcity of grade A space and confidence in occupier demand rising, developers are increasingly willing to develop speculatively and a number of outline planning consents have been granted.
  • HS2 continues the inward investment trend started by Deutsche Bank in 2013.
  • We expect occupier demand to continue with an improving economic climate and the completion of Birmingham’s infrastructure projects in 2015.

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

Record quarter for UK property investment

Investment in the UK commercial property sector totalled £20.5bn in the final quarter of 2014 – a 26% increase on the previous quarter and the highest quarterly performance on record.

The latest edition of our UK Investment Transactions report reveals that investment in the regions increased by 41% to £21.1bn for the year as a whole – the second highest figure on record.  This is the primarily the result of the resurgence of UK institutional investors – which increased inflows by almost 30% in 2014 – buoyed by improving economic sentiment beyond the capital.

In the West Midlands, total investment during 2014 soared to £2.31 billion – up from £1.59 billion in 2013 – an increase of around 44%.

Read our latest UK Investment Transactions (UKIT) report 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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