Market snapshot

Office Market Pulse Birmingham Q3 2012

The Birmingham office market saw a marked improvement in take-up during Q3 with 171,501 sq ft of space transacted - more than double the total take-up figure for Q1 and Q2.

Discounting the numerous start-up business deals at Birmingham Science Park, the average deal size has crept over 5,000 sq ft. With 70,000 sq ft still to complete for the Tribunal Service and Shoosmiths, and rumours that Deutsche Bank are close to agreeing terms for over 80,000 sq ft, the year is set to finish on a high.

In this issue:

Improved city centre take-up

While total take-up this year is 35% down on the long term average, there are positive signs on the horizon following strong take-up in Q3 and a number of large requirements coming to the market.

Q3 saw 194,338 sq ft of obsolete office space go to alternative use - 135,000 sq ft of which will be converted into a hotel. Hampton by Hilton and Premier Inn secured additional representation at Martineau Place and the Exchange Buildings respectively, pushing the city's hotel market closer to saturation.

For an annual comparison of take-up click here.

Significant occupational transactions

Property Size  Landlord(s)  Tenant/Purchaser  Lease information 
2 Colmore Square 21,000 sq ft    Nurton Developments  BPP Training  10 year lease
£24.50 per sq ft 
35 Newhall Street  18,999 sq ft    West Midlands Pension Fund  Mott McDonald  Confidential 
Maple House  15,150 sq ft     GE Capital Real Estate  Westinghouse  5 year lease
£13.50 per sq ft 

Birmingham Economic Zones could kick-start renaissance

Following research by Birmingham City Council in collaboration with inward investment programme, Business Birmingham, six economic zones have been identified with a view to generating more than 19m sq ft of new floorspace across the city, 50,000 new jobs, and £1.5bn for the local economy.

The zones have been identified to align Birmingham's planning and economic priorities, creating the opportunity for new space and improved facilities for sectors identified as having the greatest impact on attracting inward investment. These include food and drink, IT, electronics and communictations. For more information click here.

For a breakdown of current availability by grade click here.

Investment activity remains subdued

There continues to be a low volume of office investments transacted in the region as investors remain focused on London and the South East. Nevertheless, Q3 did witness a small number of larger transactions as investors continue to search for opportunistic acquisitions or best in class assets.

115 Colmore Row is the Midlands HQ for Eversheds LLP.  Let until July 2023 the property was acquired by CLAL Insurance for £32 million (6.54%). 

Despite holding one of the best addresses in Birmingham city centre, there was no interest from UK institutions.

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