Birmingham Offices Snapshot Q4 2019

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Birmingham offices snapshot q42019

Annual take-up in Birmingham city centre ended in 2019 with a total of 780,095 sq ft transacted, which exceeded the 10-year average take-up by 10%. Leasing activity in Q4 was the lowest this year with a total of 104,893 sq ft transacted.

77% of total take-up in 2019 was for Grade A space, totalling 604,321 sq ft. The Secretary of State’s pre-commitment at Platform 21 was the largest Grade A deal this year taking 110,000 sq ft., while WeWork were responsible for three of the Top 5 largest deals of the year, totalling 229,042 sq ft.

Sentiment has amongst occupiers and investors on the back of the solid General Election results. Birmingham city centre remains attractive to occupiers and with one landmark deal already signed in Q1 2020, we are expecting occupier demand to remain strong in the city centre over the course of next year.

Grade A supply was eroded further in the CBD with Prime Grade A vacancy of 3.28%. Prime rents in the city centre increased to £34.50 psf, which we anticipate headline rents to continue to increase in 2020. Annual out-of-town leasing activity was at 361,153 sq ft, nearly reaching the 5yr average of 375,417 sq ft. Q4 total take-up was at 54,786 sq ft. Pre-lets played a significant part in the M42 occupier market in 2019 accounting for 132,922 sq ft.

The lack of new supply and strong leasing levels saw availability levels continue to fall resulting in 4.80% overall vacancy. Prime rents increased to £26.00 psf. We expect the lack of supply in the out-of-town market will continue to put upward pressure on rents throughout 2020.

A total of £611 million transacted in Birmingham in 2019, almost a 50% increase on 2018 and 59% above the 10-year average. There were a total of five investment deals in Q4 totalling £263 million. We expect yields to remain unchanged as Birmingham continues to attract investor demand.


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Birmingham Offices Snapshot Q4 2019

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Douglas Bonham

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Douglas Bonham joined Colliers International in 2011 and is a Director and head of the Birmingham National Offices team. He provides strategic property advice to national and international clients including occupational consultancy, development and value add investment.

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