The Hollowing Out Of The Prime Birmingham Office District
Restrictions on public transport, social distancing and the lack of own-front-door office space are combining to create uncertainties for the immediate post-pandemic future of city-centre office space. But one place whose future as an office location ought to be secure is the primest of prime locations around St Phillip's Square, Birmingham.
In 2015 Legal & General bought the prime 36K SF office building at 43 Temple Row, Birmingham, in a deal with the Crown Estate. The £14.5M transaction bought it one of the best-located office properties in the city with a frontage to the square. This was a buy that “increases our exposure to business space assets with strong property fundamentals,” L&G said at the time, adding that it was optimistic about rental growth.
Today that prime office property is on the brink of conversion into 42 apartments. The application has been granted automatically under the 2014 exemption for office to residential conversions. The redevelopment was announced before the coronavirus pandemic but the application has been actioned during the lockdown.
Birmingham is a hotspot for office-to-residential conversion, although until now the trend had yet to penetrate far into the prime office district.
The loss of office floorspace in the St Philip’s Square area is unusual. Development sites in the district, such as at Sterling Property/Tristan Capital Partners’ 230K SF 103 Colmore Row, are preferred by office developers.
Birmingham has the highest number of applications for office-to-residential conversion under the 2014 exemption outside London and the south. According to government data analysed by Planning Resources more than 140 prior approval applications have been made.
L&G’s £110M redevelopment of the store, due to provide 1M SF of office, retail and leisure floorspace, was approved in December after objections from heritage bodies, one of which said the proposals would result in "substantial harm" to Cathedral Square, the city's picturesque heart.