Birmingham – Pausing for Breath

A recent report on the Q1 2014 office market in Birmingham by Lambert Smith Hampton highlighted a drop in office lettings in the first three months of the year. The total of 102,000 sq ft, including mid-size deals to Healthtrust Europe and Perkins Slade, was down by 10% on a year ago and the average transaction size was only just over 3,500 sq ft. The total for the whole of 2013 total was 664,000 sq ft in nearly 130 deals, although 75% of the total was in deals below 5,000 sq ft.

Nonetheless, local agents feel that Birmingham occupier confidence is likely to grow as the year progresses and point to around 500,000 sq ft of requirements for office space in the city. Metropolis is currently tracking nearly 30 requirements for office space in Birmingham including PWC, Deloittes and Berrymans Lace Mawer, as well as some at the smaller end of the spectrum.

Local agents point to a large number of office leases expiring between 2014 and 2018 and Metropolis is currently tracking over 60 firms with lease expiries due in 2014, together with a further tranche due in 2015.

There is currently a slight shortage of new office space on the market, with only 400,000 sq ft being marketed in the city at present compared to double that level during the recession. However, the future development pipeline includes major planned office schemes at Paradise Circus, 55 Colmore Row, Lumina and 2 Cornwall Street.

Looking ahead, Birmingham is going through a slight lull in market activity at present, however there are signs that is likely to pick up in the second half of 2014.

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