Calm Down, Dear: SevenCapital Says Birmingham Is Getting Too Worked Up About Losing HS2
The announcement that the government is to review how and whether to proceed with the High Speed 2 rail line from London via Birmingham to the North has raised alarm bells in the property industry.
So many investment decisions have been made on the assumption that HS2 goes ahead, and that super-fast London-to-Birmingham trains are operating by 2026, that the idea of cancellation sets nerves jangling.
But according to one big time investor in Birmingham, pinning too much on HS2 is a serious mistake.
“Should the decision be made to scrap HS2 completely, whilst it would be a blow, it is unlikely to undo all the progress that it has kick-started already, particularly within Birmingham,” SevenCapital Executive Director Damien Siviter said.
“Birmingham’s economy, population and regeneration have thrived in the years since HS2 was announced. Less due to the reality of speedier connections and widened access that the high-speed line will introduce, but more based on how HS2 has actually highlighted all the benefits that Birmingham as a city has to offer."
Where London has started to burst at the seams and as a result has been pulling on the purse strings of businesses and its population for a long time, HS2 has presented Birmingham as a seriously good, affordable alternative, and with significantly more room to grow, Siviter said.
SevenCapital and joint venture partner Long Harbour are behind the £39M project to deliver the 206-unit Lansdowne scheme at Hagley Road.
The Lansdowne will be Birmingham's second large BTR scheme. BTR is one of those sectors some argue is most dependent on the completion of HS2.
Siviter echoed the complaints of others operating in the Birmingham market that the city is not good at shouting about its strengths, and too ready to put its faith in London and “big fix” projects rather than long-term, homegrown incremental change.
“Even without HS2, Birmingham’s position, at the heart of the UK’s transport network, already provides access to all major cities in under four hours, with major motorways, the busiest rail station outside London and one of the busiest airports in the country all easily accessible,” he said.
“None of this will go away if HS2 doesn’t come to fruition. Birmingham has now embarked on its own exciting journey, and the end is nowhere near in sight.”
SevenCapital has tapped into a growing strain of thinking among Birmingham property professionals.
“HS2 will of course be a benefit to Birmingham, as it will improve links to the capital and tempt new occupiers to the Midlands, but is it essential? Probably not," Knight Frank Birmingham Managing Partner Ashley Hudson said.
Hudson argued for increased rail capacity, but thinks it could be met in other ways.
“Investors are attracted to the positive occupational dynamic of limited supply and strong occupier demand, as well as the huge inward investment in projects such as Grand Central, the tram, the Library, Centenary Square and Paradise," he said.
"In terms of office demand, Birmingham has seen a record year so far, with office takeup in H1 2019 at over 500K SF, with more major occupiers looking to locate in the city. This demand is not necessarily led by a future rail system but is a result of the successful development of the city over a number of years."
Others see the loss of HS2 as potentially damaging for the region, among them Harworth Group, which owns 21,000 acres of residential and industrial land around the Midlands and North.
"Whilst extra government attention on directing the efficacy of HS2 is welcomed, it shouldn't detract from the fact that extra rail capacity is urgently required in the UK to support growth and to take pressure off the road network," Harworth Group Head of Communications Ian Thomson said. "We hope that the review focuses its efforts on the 'how' rather than the 'whether', as any kind of pause or cancellation would be a retrograde step.”