The City Centre Is Changing Shape And It Is All Down To Residential
Birmingham city centre is being reshaped — literally — and it is all down to a five-year surge in residential values.
A 31% rise in average residential values since 2013 has helped improve the viability of complex sites, Savills’ Birmingham: Delivering Transformation report said. The result has been a development pipeline of 21,000 residential units, including 1,800 build-to-rent.
Developer confidence is boosted by projections that between 2018 and 2023 Birmingham house prices will grow at a compound 14.8%, far ahead of the 7.1% predicted for London and the 11.5% predicted for the South East, the report said.
“Increasingly, we have seen investment from specialist and historically London-centric developers such as Berkeley and Galliard looking to Birmingham to capitalise on the continually growing market," Savills Head of Midlands Residential Joe Shorney said. "This influx of developers and institutional funders to the city centre is creating increased confidence and resulting in boundaries being pushed, with local and regional house builders looking for opportunities in the areas beyond the city centre.”
Savills calculate that 2M SF of office space has been recycled for residential use, changing the configuration of city centre neighbourhoods and forcing commercial developers to explore sites outside the traditional core, beyond the former inner ring road and into previously fringe areas. Expansion both east into Curzon Street and west toward the 1M SF Axis scheme is predicted.
Announcements about the preferred developer for the 34-acre Smithfield wholesale markets site are expected after the city elections in May, and Savills said this site will also help push development beyond the traditional limits.
A total of 603K SF of new office floorspace is under construction in the city centre.
Further out, Savills highlights the link between the city centre and Birmingham Airport as a key corridor for growth.