‘Hesitation’ from private sector sees occupiers sit tight
Birmingham’s biggest office deal of the year so far rescued a dismal quarter that property agents believe reflects “current occupier hesitation” in decision making.
The Government Property Agency’s agreement to take the whole of Platform 21 as a new regional hub – a deal that was agreed last month and announced yesterday – accounted for more than two-thirds of the 160,593 sq ft take up of office space in July-September.
Although the city’s headline statistics are strong – the 675,200 sq ft taken in the first nine months of the year has only been bettered once in the past decade – the private sector occupiers have been largely absent.
Birmingham office take-up, January – September 2019, by occupier type:
There have only been seven deals for more than 10,000 sq ft in 2019. They include three public sector deals – GPA’s lease for Platform 21, the Commonwealth Games taking 72,261 sq ft in Brindleyplace, and the NHS’s 10,917 sq ft at Colmore Circus – and We Work’s three deals, for 92,670 sq ft, 81,280 sq ft, and 55,092 sq ft.
Irwin Mitchell’s deal for 46,750 sq ft in the Colmore Building in March is the only five-figure deal from a private sector occupier this year.
The other 84 office deals in Birmingham that were recorded to the end of September were for an average of less than 2,600 sq ft.
The Birmingham Office Market Forum (BOMF), which compiled the data, said: “The Q3 take up is clearly dominated by a single larger transaction of over 110,000 sq ft but otherwise is reflective of current occupier hesitation in their decision making process, particularly in the mid-range deal size.
“Nevertheless, given the year to date and identifiable latent demand, the BOMF members remain confident that the long-term average (730,000 sq ft) will be exceeded by the end of the year.
“The market remains positive and is looking forward to the delivery of the new build offices in Q4 at 2 Chamberlain Square and Three Snowhill providing some much needed grade A office supply.”
