Birmingham tops regional office market

NEW research suggests that Birmingham and Manchester were the best performing regional office markets throughout last year.

The report by real estate advisor CB Richard Ellis says that take-up in the two cities outperformed the 10-year average.

Other cities around the UK, including Aberdeen, Bristol, Edinburgh and Glasgow, all saw take-up increase from 2009 but failed to reach the decade’s average take-up.

Investment activity in the regions was up by 21% in 2010, with Birmingham proving the top target, according to CBRE.

Deals worth more than £460m were transacted in the city during the year, which at 54% up on 2009, was more than double the regional average.

Prime yields in both Birmingham and Manchester are now neck-and-neck at 6% with prime office take-up in the second city in 2010 at 690,000 sq ft.

Prime office rents in Birmingham are also on the increase, moving from £27 per sq ft in the first half of 2010, to £28.50 by the close of the year.

Separate research by consultancy Cushman and Wakefield suggests that Birmingham’s office market is enjoying a steady recovery as rents increased by 5% last year – an improvement on 2009 when they declined by 15%.

Its ‘Office Space Across the World 2011’ report shows that the city is now ranked equal fourth in the UK with Glasgow when it comes to prime office rental levels with London West topping the list, following by the City of London and Guernsey St Peter Port.

London held its top spot as the most expensive office location in Europe, with the West-End sub-market seeing a 27% leap in rents, according to Cushman and Wakefield’s research.