Birmingham's Office Market: The Long Fall May Be Over
Birmingham’s central business district office market fell off a cliff in Q2 2020 and continued falling to the year-end. Has it now hit the ground?
That grim thought is providing some comfort as the authoritative 2020 take-up figures from the Birmingham Office Market Forum are released.
Take-up in Q4 was 40K SF, sharply down on the 80K SF in Q3 and the 61K SF in Q2. This contrasts with the Q1 total of 339K SF, a figure boosted by a turn-of-the-year 283K SF letting to BT at Ballymore’s Three Snowhill.
“I think that while there are restrictions limiting occupier’s ability to both view and also occupy offices, the take-up rates are bound to continue to be below average until there is an easing. Hopefully that means just the first quarter, but time will tell,” JLL Offices Director Jonathan Carmalt told Bisnow.
The 2020 annual total was 521K SF in 50 deals, showing a further acceleration in a downward trend that pre-dates the coronavirus pandemic. The city recorded take-up of 780K SF in 2019 and 754K SF in 2018, both down on the historic peak of 1M SF in 2017.
Even so, given the grim background, agents take comfort from the fact that the pandemic that effectively closed the UK economy is, they argued, a sign of resilience.
“The 2020 total outcome of over 500K SF is therefore considered to be a respectable performance,” a statement issued by the Birmingham Office Market Forum said.
“Birmingham’s strong fundamentals remain, with low levels of grade-A supply and the delivery of the next generation of new-build developments having completed at Three Snowhill and 2 Chamberlain Square, Paradise. 2021 will also see the delivery of the much anticipated 103 Colmore Row. The first occupiers will start taking occupation as the year progresses and as restrictions are lifted.”
The largest deal in Q4 saw AXA Insurance take 14K SF at Epic’s St Philip’s Point.