Speculative development vital to Birmingham’s success
Birmingham is benefitting from “concerted infrastructure investment and development”, cementing its status as a first-class business destination, according to Lambert Smith Hampton (LSH).
The national property consultancy’s Midlands Engine office market report states that the city has experienced outstanding levels of activity and despite market uncertainty surrounding the EU referendum result, Birmingham is well placed to secure future inward investment from London relocations and overseas occupiers.
Alex Tross, director of office agency at LSH Birmingham, explains:
“The shock result of the EU referendum has come at an unhelpful time, but the fundamentals to support development are robust.
“Few occupiers have the luxury of being able to wait 12–24 months to have an office built and we need to provide the buildings that can satisfy immediate requirements so that the economies in our towns and cities can flourish.
Where viability is marginal, we need to be seeking innovative ways to ensure much needed development is realised. If we don’t, occupiers will be forced to look elsewhere.”
Grade A supply will be boosted at the end of 2016, thanks to waves of much-needed new development, while early 2017 will see 350,000 sq ft of premium office space delivered with the completion of 55 Colmore Row, Cornerblock at Two Cornwall Street, and Crossway. These could potentially push prime headline rents to £32.00 per sq ft in 2017.
Availability in the out of town Birmingham market is at its lowest level in almost a decade at 760,000 sq ft.
“Those developers who are willing to grasp the right opportunity and bring forward new stock will be the winners. If the private sector fails to deliver, the public sector can, of course, use its regeneration powers or strength of covenant to drive development forward.”