Blip Or Trough? Birmingham Office Take-Up Plunges By 25%
Fewer and smaller deals meant Birmingham's office leasing market plunged in 2018.
Birmingham's office market ended 2018 with take-up down more than 25% on the total deals recorded in 2017.
Figures from the Birmingham Office Market Forum show final quarter take-up of 278K SF, bringing the 2018 total to 754K SF.
This compares with 1M SF recorded in 2017.
The fluctuation in take-up will not alarm seasoned observers of the Birmingham scene. The 2018 outcome just exceeds the 10 year average take up in central Birmingham and demonstrates a strong finish to the year after a steady start, the Birmingham Office Market Forum said. Comfort will be drawn from the fact that 2018 was slightly better than both 2016 (629K SF) and 2014 (713K SF).
However, there is no escaping the serious fall in take-up nor the sharp fall in the number of deals transacted.
The volume of deals in 2018, just 113, was sharply down on 2017, which saw 130, which was itself a relatively low total compared with 139 in 2016, and 148 in 2014.
But there is good news here, too, if medium-term data is allowed to provide a context. Average deal size is now 6.7K SF, compared to an average of 7.7K SF in 2017, but over the period 2014-2016 average deal size was 5.6K SF, and in some years as low as 4.9K SF. That makes 2018 look rather ahead of the Birmingham trend.
“Given generationally low levels of available Grade A supply and a strong and improving level of named enquiries in excess of 75K SF, the prospects for significant activity in the pre-let/pre-completion market are very promising in 2019 in both the central business district and M42 office markets," Cushman & Wakefield Head of National Office Agency Scott Rutherford said.
"Generally though, given the paucity of supply of existing brand new or previously unoccupied space, a number of business service occupiers are looking to secure the best space well ahead of contracted lease events as they seek to establish ‘first mover advantage’ over existing supply," Rutherford said.