The Cost of Office Space in Birmingham 2024

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The latest figures show that take up across Birmingham was 173,000 sq ft which represents a 21% drop against the previous quarter, and a 35% decrease on the 10-year average. Market performance was slightly better when looking at deals in the city centre with activity only 24% below average levels.

Despite a marginally stronger take-up period last summer, the market is still falling well below pre-pandemic levels. Activity has been focused on the core of the city which is influenced by an appetite for high-quality space, however these are currently in short supply with the availability rate of Grade A space currently sitting at 2.5%

Prime rent in Birmingham

Prime rent in Birmingham currently sits at £41 per sq ft, and there is confidence that top rent will reach £42.50 in 2024. This is based on the 2.5% prime rental growth experienced in Birmingham over the past 12 months.

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The cost of office space in Birmingham 2024

These costs are a guide provided by local commercial property experts and rent reports. Costs are updated each quarter, and are subject to change.

Vertical market activity

The most active sectors in the Birmingham market are currently Government, Professional and Financial Services, with transactions across these businesses accounting for 64% of total take-up over the last four quarters. The headline deal in the most recent quarter was Lloyds Bank taking 59,896 sq ft at 6 Brindleyplace.

Over the last five years, 11 different sectors have acquired Prime space which indicates the rising demand for best-in-class space across all business types. Elsewhere, the rise of Flex has greatly impacted the Birmingham market, with 27 operators across 45 spaces.

Demand for Grade A space

Recent figures show that 100,000 ft of space transacted was Grade A and equates to 65% of the overall total for Birmingham. Grade A demand has accounted for 72% of take-up in the past five years and market trends show that this weighting towards tenants taking prime space will remain.

The latest availability figures for Grade A space in Birmingham show 367,983 sq ft of available space in key buildings such as 10 Brindleyplace, One Centenary Way and 103 Colmore Row. Based on the current demand for Grade A space, the availability of Grade A space is 2.5% which is predicted to be equal to 0.9 years of supply and is the highest availability of all major cities

What tenants want

Organisations are currently focusing on two things: taking quality space and agreeing to more flexible terms. The increasing demand for flex space from corporate users is likely to influence the expansion of more flexible offices in the city due to the current and predicted demand. This is likely to affect the cost of office space in Birmingham and similar trends will affect prices in other big cities.

ESG has become the word – or acronym – on everybody’s agenda. Commercial property agents, landlords and occupiers alike are all assessing the relationship they have with their teams, how they use their office space and how this affects their property strategy. Environmental, Social and Governance (ESG) has become an ethical priority for occupiers, enabling them to enhance their corporate decision-making and, as one of many benefits, make their organisations appealing to existing and potential talent.

Another key trend behind this activity is that more companies are relocating from London to Birmingham to set up their offices. This shift is helping to diversify the city as an increasing number of national and international firms are choosing to open major offices in Birmingham. With a broader range of occupiers being reported in the quarterly transactions, the resilience of the market is being proven; something that has been previously acknowledged in Solihull and the M42 corridor.

The outlook for Birmingham office space

As companies continue to rationalise their space, landmark properties like 103 Colmore Row have demonstrated the pull of high-quality office space, with several businesses opting to reduce their space and relocate to the impressive new property.

The delivery of 400,000 sq ft of new space at Enterprise Wharf and One Centenary Way is also an important addition to the Birmingham market with an additional 464,000 sq ft available to let across under-construction schemes due to complete by 2025.

Following the refurbishment of 10 Brindleyplace, the property provides an additional 210,000 sq ft of Grade A space which includes a 27,000 sq ft flexible co-working space. This type of scheme is providing new amenity-rich space to tenants in Birmingham’s city centre.

Another important addition to the Birmingham commercial property market is the work that has begun at St Philips Point in Temple Row. This £5.5 million refurbishment of an existing office building in Birmingham’s business district will provide 65,000 sq ft of Grade A workspace over 10 floors. Renamed Arca, this building will be another state-of-the-art office building which will provide tenants with quality amenities and end-of-trip facilities.

For further advice on the Birmingham office market, our regional workplace experts can guide you through both tenant and landlord markets in greater detail.

The Birmingham Office Rent Report 2024

Our market overview and insights are designed to assist you with your office search in Birmingham.
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