JLR effect is ‘creating market shortage’

THE Solihull and the Birmingham out-of-town office market has enjoyed a strong year with several substantial and significant transactions, a new study has shown.

KWB said in its annual office review for the areas that deals for 465,275 sq ft of space had been completed during 2015, with the motoring industry again providing a major stimulus to the activity levels.

Several large deals were completed during the year, most notably the 114,000 sq ft pre-let to Interserve and 46,000 sq ft let to National Grid.  

In addition, Chinese automotive firm Changan acquired a part-investment office complex, totalling 80,000 sq ft, at Birmingham Business Park for its own phased occupation.

However, KWB said that with no speculative developments for office space in Solihull on the horizon, demand was starting to outstrip supply.  

It said there was currently only around 10,000 sq ft of brand new, Grade A office space in Solihull and the M42 Corridor, and with no speculative development planned there would be an obvious shortage of high quality office space.

KWB said occupiers were demanding high quality space, and this is why investors and developers had been motivated to refurbish stock extensively, even down to the complete overhaul of all mechanical and electrical elements of the property – making it attractive to occupiers.

The continuing expansion of Jaguar Land Rover, while good for the economy, was nevertheless placing a strain on the supply of suitable accommodation.

Firms wanting to work with and supply the company were looking to move in close by but were finding it increasingly difficult to secure good space.

Besides automotive, utilities have continued to take a significant share of the take-up, although the professional services showed the highest take-up, influenced by the Interserve pre-let.

The Telecoms, Media and Technology (TMT) sector also represents a strong portion of 2015’s office lettings.

Solihull and the surrounding areas continue to be popular among these sorts of companies, with BT, Convergence Group and Edenhouse joining existing, larger, occupiers such as Pinewood Technology and Steria.