These Three Numbers Explain Birminghan's Office Market In 2018
If you only remember three numbers today, try to remember these: 169, 44 and 825,000. Between them they explain the shape of Birmingham's office market. The numbers are the big take-aways from a new research bulletin from Savills.
The total volume of investment in Birmingham offices in Q1 was £169M, a staggering 71% above the 10 year quarterly average of £99M. Savills said this was in part driven by TH Real Estate's c.£98M acquisition of 55 Colmore Row. Conclusion: Birmingham is a capital market star.
Not only is Birmingham a capital market star, it is pulling in serious volumes of international investment. Taking into account the latest transactions, overseas investors accounted for 44% of office investment in Birmingham since 2016. With yields around 4.75%, 75 basis points higher than in London, the appeal is clear. Conclusion: International money talks.
Last year take-up in the central Birmingham office markets topped 1M SF for the first time. According to Savills that performance will not be repeated in 2018, despite a strong start to the year. Take-up in the Birmingham office
market reached 148K SF during the first quarter, 14% above
the 10-year first-quarterly average. Savills forecasts a total of 825K SF to be leased this year. Conclusion: Macro-economic fears may be slowing the market.