JLL – Infrastructure is catalyst for new office boom
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Ian Cornock
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BIRMINGHAM has long been just a major transaction or two away from supply issues for Grade A stock, as JLL warned at its 2014 Predictions event. Now HS2 Ltd is taking 100,000 sq ft of prime space out of that dwindling pipeline, Ian Cornock, lead director in Birmingham at property consultancy JLL, said: “It will force people to look again, and more closely, at what they are planning to do in the city centre, for developers, potential occupiers and organisations looking to relocate. “Modern corporates prefer to operate from sizeable floorplates, so the loss of 100,000 sq ft at Two Snowhill really narrows down their options. “It could be that we start to see action on phase two of the Post & Mail site. The car park will be finished by the year-end, so they could build on that platform. “Wragges is also relocating to Two Snowhill from 55 Colmore Row, and that will open up a major refurbishment opportunity behind that wonderful facade. “Regional JLL chairman Jan Thompson believes the HS2 decision will persuade Ballymore to crack on with Three Snowhill, which will be a very significant addition, both to the Birmingham skyline and the city’s Grade A office stock. “I think he’s right. We now have a funding market where a pre-let of around 50% would be enough for a developer to proceed, and bringing the third element of that scheme forward would be a huge boost for the city and the office market. “However, it’s important that proposals are brought forward quickly. We need to see new space coming out of the ground in early 2015, as potential tenants need to feel there is a real sense of commitment. “Paradise Circus, for example, which is a major development planned for the Central Business District, is clearly progressing, but, with significant infrastructure changes to be implemented, is still a little way off. “The great thing for Birmingham, though, is that other huge infrastructure projects – the runway extension at Birmingham Airport, the Midland Metro extensions and New Street Gateway – demonstrate a city which has belief in its future, which is what companies, especially those coming from overseas, want to see above all else.” Thompson – who played a central role in the relocation of Deutsche Bank to Brindleyplace, Birmingham’s biggest-ever FDI (foreign direct investment) project – agrees and takes the rationale a step further. “I’m conscious some may think me over-optimistic, but I really believe that when HS2 is a reality, that more London-based companies will move significant chunks of their operations to Birmingham,” he said. “They may well want to keep their HQ in the capital, of course, but I’m sure that the reduced travelling times and Birmingham’s business-friendly reputation will persuade some of them to take serious amounts of office space here. “London is overheated and very expensive, for both occupiers and their staff, and I don’t see that improving dramatically in the forseeable future. “Arguably though, the best thing of all to come out of the HS2 news, is that we now have a proper 15-year plan to deliver infrastructure, which gives everyone in the property and development sectors the certainty they require.” More articles in
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