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Is Birmingham About To See An Autumn Investment Surge?

No 1 Colmore Square, Birmingham

The first modest signs that some investors see today’s coronavirus-inspired economic uncertainty as an opportunity are beginning to appear in Birmingham’s property market.

A series of low-key and often off-market transactions are reported to be on the brink of completion, which could lead to a mini investment surge in Q4.

Oval Real Estate has been in talks to acquire Legal & General’s 200K SF One Colmore Square since early summer.

The £86M price reflects a yield of 6.15% and a standstill in pricing since the LGIM UK Property Fund acquired the block in 2015.

The 22K SF fifth floor is available in a building with a tenant list including Cushman & Wakefield, Ernst & Young and the General Dental Council.

Simultaneously the city’s thriving industrial and logistics sector is attracting investor interest, with widespread rumours of imminent deals.

According to data published this week by CBRE, the West Midlands has so far captured only 4% of the wave of investment heading into UK logistics property. In contrast, the East Midlands scored 24% and the South East attracted 45%.

H1 2020 saw industrial investment volumes totalling £2.1B, with a 75% increase between Q1 and Q2, roughly a third of which went into the distribution sector.

Interest in the sector is underpinned by UK take-up of 19.1M SF during H1 2020, thanks to an impressive second quarter during the lockdown, CBRE said.

Contact David Thame at david.thame@bisnow,com.