During the pandemic, many of us feared that work from home culture would render the modern British office a redundant space – and we were wrong. In fact, the prime office market has experienced a resurgence like no other, with many employers and employees alike relishing the collaborative feel and interaction that shared workspaces can offer. Nowhere is this more prevalent than in England’s second city, Birmingham. As the London commercial market becomes increasingly impenetrable and expensive, many businesses have been turning to the West Midlands to find their ideal prime office space. With HSBC, BT, KPMG, PwC and Deutsche Bank all setting up large commercial hubs in Birmingham, it is evident that the prime office market in Birmingham is more robust than ever.
The Status Of Birmingham’s Prime Office Market
Thanks to the combination of the Birmingham Commonwealth Games and the upcoming HS2 station at Curzon Street, all eyes are on Birmingham. The city is becoming a more viable alternative to London with its extortionate prices and fierce competition for prime commercial office spaces, with businesses recognising that Birmingham offers greater value for money and will soon be within one hour of the capital thanks to the upcoming HS2 development.
Birmingham’s prime office market has always been strong, but it continues to grow from strength to strength. 2020 saw over 520,000 sq ft of commercial office space taken up, followed by 656,000 sq ft in 2021, and a whopping 692,000 sq ft in 2022. Considering that Britain was in the midst of a pandemic during 2020 and 2021, this level of growth is impressive, and demonstrates that businesses have continued faith in the Birmingham commercial market despite the challenges of the pandemic.
Furthermore, demand for prime office spaces in Birmingham is on the rise. In Q2 of 2022, only one per cent of prime office spaces in Birmingham were available for rent, which not only indicates that there is an increase in the number of prime office leases, but demonstrates that there is strong tenant retention in the Birmingham prime office market. With so few prime office spaces being on the market, it is not shocking that prime rents in the city are increasing, with Birmingham prime offices costing £39 per square meter, which is in excess of those in Manchester at £38.50, Leeds at £35 psm and Cardiff at £25 psm. This is indicative of the strong demand for prime office spaces in the second city, which is driving competition and prices upwards.
Prime Office Spaces In Development
Such competition across Birmingham’s prime office market has encouraged many developers to start planning and constructing various Grade A commercial office spaces across the city, with a range of exciting developments in the works at the time of writing. Here are just four of the most promising constructions:
One Centenary Way is, at the time of writing, nearing completion. As the first building to be completed as part of the second phase of the Paradise redevelopment, One Centenary Way offers an abundance of city centre commercial space spread across sixteen floors.
Three Chamberlain Square is part of the broader Paradise development in the centre of Birmingham. Occupying an enviable position between Victoria Square and the Library of Birmingham, Three Chamberlain Square will offer 189,000 sq ft of office space spread across ten floors.
The site of the former John Lewis department store at Birmingham Grand Central Station is also set to be revived to create an impressive 200,000 sq ft of commercial workspace in the heart of Birmingham. With an eye to complete in 2025, this ambitious project will create some of the best connected office spaces in the country, and will come with a plethora of key amenities such as a rooftop garden lounge and additional communal spaces, not to mention the array of facilities already present at Grand Station.
The Beorma Quarter in Digbeth is also worth watching out for. This mixed-use development combines residential, hotel and 250,000 sq ft of Grade A office space in the heart of the Smithfield Regeneration project. This project is currently entering phase two, and is already proving to be exceptionally popular thanks to its proximity to the Bullring Shopping Centre, Grand Central Station, and upcoming Curzon Street HS2 hub.
Trends In Birmingham’s Commercial Space
Many of the aforementioned prime office spaces in Birmingham, as well as those that have recently completed construction, have put a focus on the trends of sustainability and mixed use.
There is a significant disparity between the availability of residential properties and the number of searching homebuyers and tenants, creating a housing crisis which is driving prices up and making it difficult for people to find appropriate housing. As such, it should come as no surprise that developers are intent on creating mixed use properties that combine both residential and commercial units into one broader building. However, this comes with more benefits than merely appeasing the struggling residential market. Occupants of these residential units will surely be attracted to the ease of commuting to their adjacent offices and workplaces, thereby benefiting the dynamic of hybrid work. Furthermore, both commercial and residential occupants will benefit from the surrounding amenities of inner-city Birmingham, with shops, cafes, libraries and travel facilities benefiting residents just as much as businesses and their employees.
Sustainability has also been a prevalent trend when it comes to Birmingham’s prime office market, with developers under intense pressure to provide eco-friendly solutions throughout their units. Corporate social responsibility is a significant factor which encourages many developers to actively seek and promote sustainable practices in their work, as well as mounting pressure from the government to pursue greener alternatives to align with new national standards. For example, One Centenary Way has chosen to use pure electric heating and hot water supplies; the Beorma Quarter uses an Aquifier Thermal Energy Storage system to access green energy; and the 103 Colmore Row Tower has integrated electric car charging points, sourced its construction materials ethically, and utilised low and zero carbon technologies when erecting the development.
As your partner in property, Centrick are the ultimate experts in the Birmingham prime office market. Our team of local commercial property professionals work with landlords, tenants and developers alike to join the dots between occupier needs, best-in-class accommodation, and ever-changing property trends. From one-off deals to curating the perfect property portfolio, we are here to assist you no matter what point you are at in your commercial property lifecycle. Contact our team below for more tailored advice:
