Experts predict Birmingham office rents will reach new highs

UNPRECEDENTED demand for prime office space in central Birmingham is set to see headline rents rise to new highs of up to £35 per sq ft over the coming three years, according to senior real estate figures questioned by Deloitte.

The poll was conducted at the accountancy and advisory firm’s annual Midlands Real Estate Dinner.
 
Work to transform Birmingham’s skyline with more than 1m sq ft of new office space is not expected to come on stream until 2018, creating a significant short-term shortage of quality office space and putting increasing pressure on rents.
 
Edwin Bray, partner for Deloitte Real Estate in the Midlands, said: “Until major schemes such as Arena Central and Paradise are completed, it’s going to be very difficult to find large open plan floorplates in the city.

“We’ve seen this reflected in headline rents which have moved from around £27.50 per sq ft last year to their current levels of around £30 per sq ft. The trend is only going to continue in the coming years as rents soar to new highs.”
 
Creating better performing buildings and work spaces also has a role to play in attracting major relocations to Birmingham and the Midlands, the dinner guests heard.

An overwhelming 95% of those surveyed by Deloitte expect to see more significant moves from London to Birmingham in the next 12 months, following HSBC’s plans to move its UK bank head office to Birmingham by 2018.

Relocations such as this were reflected in the region’s property industry leaders’ support of the Government’s plans to devolve more power to English cities. Everyone questioned agreed that the region should create a ‘Midlands Powerhouse’ to rival other major cities.