‘Dearth’ of new stock on M42 corridor
This year will be “crucial” for the fortunes of the region’s most powerful economic corridor, according to a specialist in the out-of-town office market.
KWB’s head of office agency, Malcolm Jones, believes that the area along the M42 – which has been a major driver of growth for 20 years and more – is in urgent need of new Grade A stock.
Jones also highlights that Birmingham Business Park (BBP), which has let more space than any other location on the corridor in recent years, continued to perform strongly as 2019 came to a close.
He points out that 77% of all deals involving existing stock concluded during Q4 2019 were transactions at the park.
“There were too many lettings at that location to list during 2019, but one of the stand-out deals for us was GKN taking just over 13,000 sq ft at 2100 The Crescent, where the landlord was the global investment manager BlackRock, which is the biggest landlord on the park,” he said.
“It was also very pleasing to see the British Heart Foundation sign for almost 10,000 sq ft at Compton House, where the client was Germany-based Uniper International.”
More than 150 companies and organisations are now based at BBP, and Jones says its combination of excellent transport links via road, rail and air, and its setting amid 148 acres of mature parkland, will continue to attract potential tenants.
However, the park’s years of success mean that its supply of available Grade A office stock has dwindled to a record low, meaning that new space must come on stream during 2020.
“At the start of January, the vacancy rate is just 3.9% which is the lowest anyone can remember,” says Jones.
“However, I believe developers are considering proposals to bring forward Grade A space on a speculative basis, at J6 of the M42, which would be great news. Bromsgrove and Redditch also saw several deals during Q4, and more are expected in early 2020.
“Such new product will be absolutely vital for the health of the economy, because the corridor between Solihull, the NEC, Birmingham Airport, and the West Coast main-line station, has been the region’s most powerful single driving force for years – and what happens during 2020 will define its future impact.”
