Numbers Don't Lie: Birmingham's Real Property Market Recovery
Some good news, at last.
After some alarming projections on Birmingham office market vacancy rates, and the widespread sense that the market’s pulse is weak, and may get weaker if lockdown restrictions begin to bite, some data to cheer.
A total of 55% of the rent due on the September quarter day had been paid in the West Midlands by Tuesday 6 October. This compares with 41% in the North West and just 37% in London. The West Midlands’s nearest rival was Yorkshire, where 53% of rent due had been paid.
The data from Re-Leased, the cloud-based commercial property management platform, showed over the entire UK commercial property market, a total of 50% of rent had been paid by Tuesday. Importantly, rent paid is up on both the March (44%) and June (50%) quarter days.
Retail properties have seen a strong rebound, with rent collection jumping from 40% at day 7 in March to 51% today, the office sector rising from 52% to 61% and, surprisingly, the industrial sector holding steady at 48% despite a modest uptick in June.
Regional performance has remained relatively steady: The West Midlands saw the highest level of collection on day 7 after the June quarter day (61%).
“If the rate of collection continues on this trajectory, landlords should expect to meet, or possibly just surpass, the volumes that came in for the June Quarter,” Re-Leased chief executive Tom Wallace said.
Re-Leased said there has been growing pressure on retail occupiers to pay their rent, or for those who are genuinely struggling, to pay what they can afford.
Separate data from Birmingham Office Market Forum showed office take-up in central Birmingham for the first three quarters of 2020 reaching a respectable 480K SF after Q3 contributed a further 80K SF in 16 deals.
However, this data comes with a downside: Q2 and Q3 contributed just 141.5K SF, with all the heavy lifting happening in Q1, before lockdown.
“Whilst transactions unsurprisingly remain below normal levels, it is encouraging to see an increase in activity during Q3 and some long-term commitments being made by the professional service sector in respect of high-quality office accommodation in the city centre,” JLL Director and BOMF spokesperson Jonathan Carmalt said.