‘Covid quarter’ takes office deals to all-time low
The impact of Covid-19 meant office deals in Solihull and the M42 corridor hit an all-time low during Q2 2020, with just 12,000 sq ft of Grade A space let through three transactions.
Previously, the quietest quarter on record had been the start of 2015, which saw ten deals complete with almost 26,000 sq ft.
However, Malcolm Jones, the head of office agency at Birmingham-based independent KWB, remains bullish for the second half of 2020.
“Inevitably, the ‘Covid Quarter’ – as it’s being called in the property industry – brought the market to a virtual halt in terms of completed transactions, as elsewhere, but inquiry levels in Solihull and along the M42 have remained resistant,” he says.
“Yes, the hat-trick of deals only represents a morsel by comparison with the levels achieved over many years, but the appetite is still definitely there.
“We alone are handling inquiries and requirements for some 50,000 sq ft, and those deals are either in the hands of solicitors, or viewings have taken place and the final details are waiting to be confirmed by the occupier’s board.
“I expect the overwhelming majority of those lettings to happen. No-one is suggesting inquiry levels are back to normal, but the Solihull and M42 market is already picking up the pace again very quickly.”
Jones’s optimism is bolstered by the nature of the three Q2 deals, for the National Fostering Agency and HITEC Power Protection on Birmingham Business Park, and for the sports pool betting app, Low6, at One Cranmore in Solihull.
“They were all either expansions or relocations from outside the area, which underlines the appeal of the region and the demand for office space.”
He also believes the government’s strategic focus on infrastructure will be of particular benefit for Solihull and the M42 corridor.
“Consent for the Highways England project at J6 of the M42 was granted in May, and its £280m programme of works will dramatically increase the region’s strategic capacity to deliver economic growth and future developments, not least HS2,” says Jones.
“Equally, Arden Cross, a giant mixed-use scheme spanning 340 acres which will house the new Interchange Station and deliver significant amounts of business, leisure and residential space, will have a significant impact on Solihull’s commercial landscape.
“Both those developments are for the medium-term, but if we just look forward to 2022, a landmark office scheme (Westgate) is underway in the town centre, which will provide 114,000 sq ft of new Grade A space over seven storeys, and be constructed to BREEAM ‘Excellent’ standards.”