Birmingham office market on course to beat 10-year take-up average

BIRMINGHAM’S office market is on course to beat its 10-year average take-up figure – despite a sluggish third quarter.

Property consultancy CBRE said the overriding factor in helping to tilt the balance during the final quarter could be successful deals for several large requirements currently circulating within the city’s office market.

Ashley Hancox, the firm’s Birmingham-based executive director of office agency, said there was a strong possibility that at least one of these could land in Q4.

“The underlying positive and confident fundamentals of the Birmingham office market haven’t changed. The core reasons occupiers want to be based here didn’t suddenly disappear in Q3,” he said.

“I’m expecting a marked improvement in the take-up figures as we move forward and 2016 will still be judged a positive year for the city’s office market.”

CBRE’s research shows that a large take-up in the central Birmingham office market in the first nine months of this year could be attributed to professional services (34%), with business and consumer services, and leisure following behind with a 25% share each.

CBRE’s Q3 Update also confirms figures released by Birmingham Office Market Forum (BOMF) which shows that take-up in Q3 2016 in the central Birmingham office market totalled 95,546 sq ft.

When added to the deals to the end of June, the year to date total is 595,338 sq ft, against a 10-year average annual take-up figure of 663,000 sq ft, despite the Q3 take-up being relatively low.

CBRE said it remained confident that the average annual take-up figure would be beaten and that 2016 – taken as a whole – would be another solid year for the Birmingham office market.

“As far as the Birmingham office market is concerned the direction of travel has not changed and the Q3 take-up figures will be seen as a bump on the road,” said Mr Hancox.

“Given the uncertainty following the Referendum it is not surprising that occupiers of all types paused to take a breath and that had an impact on the office market of Birmingham and other cities.

“But it is important to look at the bigger picture and it seems clear that the average annual take-up figure will be topped once the Q4 figures are in.”

He said underlying demand for office space in the city centre remained strong, as was demonstrated by the fact that transaction volumes in Q3 were consistent with previous quarters.