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Prime Birmingham office rents are expected to grow by 10.4% in 2021 thanks to a surge in demand from the tech sector.
Data from Knight Frank suggests that rising tech sector employment, up 13% in the last two years, is helping to drive up office rents.
Tech growth is more apparent in the coworking sector. Since 2016, take-up in this subsector has risen sharply from 4% of Birmingham office transactions, to 22% to date in 2018, equating to 313K SF.
This has coincided with a shortage of new Grade A space, pushing second-hand Grade A rents close to prime levels and giving Knight Frank the confidence to forecast 10.4% growth in prime office rents to 2021, from a headline rate of £33.50/SF at the end of Q3 2017 to £37/SF in Q4 2021.
“Whilst Birmingham’s adoption of flexible and serviced offices may have been sluggish at the outset, it is playing catch up fast. Investors and developers have embraced the sector, by either accepting leases to operators or establishing their own platforms," Knight Frank Birmingham Head of Office Ashley Hudson said.
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