4 Facts Proving Birmingham's Office Market Is Taking Off
The central Birmingham office market may have returned to something like normal.
Office take-up in Q3 2021 in the central Birmingham office market totalled 243K SF in 19 deals. Added to the 253K SF accumulated during the first half of the year brings a three-quarters total of 496K SF in 63 deals.
This is a shade above the 480K SF recorded in the first nine months of 2020, but represents a more even performance: In 2020 almost all the letting activity happened before the March 2020 lockdown.
But the latest figures contained some concealed surprises that add to the sense of optimism.
This is what you need to know.
1. It’s better than it looks
If you included 109K SF of deals that saw office space taken for non-office use or for new concepts that have yet to emerge, and you included a small chunk of floorspace taken by a central Birmingham user in a slightly off-pitch location, the quarterly take-up rises to 352K SF.
The Forum, which likes to keep things regular, advises against this kind of maths. But the deals in question undoubtedly ate into office floorspace, albeit for various educational uses, for a yet to be completed hotel-meets-coworking concept and for the Indian consulate.
If you think like the Forum, ignore this. For everyone else, it feels like good news.
2. This is better than pre-pandemic
Q3 2019 was an odd quarter, thanks to occupier hesitations and a hiatus in the supply of new grade-A floorspace. Birmingham Office Market Forum figures show take-up in Q3 2019 at 161K SF in 35 deals.
Without the Government Property Agency signing up for 110K SF at Platform 21, it would have been an unusually grim quarter.
Even so, the Q3 2021 figure is appreciably stronger at 243K SF.
Compare this with the 80K SF recorded in Q3 2020 and the trend is clear.
3. The nine-month total is encouraging
The last full year before the pandemic, 2019, yielded a total of 675K SF take-up in the first nine months.
This figure makes a more realistic and demanding benchmark for 2021 central Birmingham take-up. The first nine months of 2020 scored 480K SF, and the 2021 equivalent of 496K SF brings the total a little closer to normality.
By 1 October 2019 the central Birmingham area had seen a total of 90 deals. By the same point in 2020 it had plunged to 37 deals. But in 2021 the deals tally bounced back to 63 deals.
4. The mid-market is back
Deal size also tells a story. Before the pandemic, the 2019 average deal size was 7.5K SF. This swelled to 13K SF in 2020 as only a handful of larger occupiers pressed on with relocation plans. But 2021 sees the average deal size return to something like normal at 7.9K SF. This suggests the mid-market is back in town.