Birmingham Q2 office market shows ‘flight to quality’
Birmingham’s office take-up in the second quarter of the year highlights a flight to quality balanced by a smaller requirement, according to a new report.
KWB’s Birmingham Office Market Research – Q2 2022 shows office transactions totalled 117,599 sq ft, 43% down on the Q2 average. Yet 28 deals took place, meaning occupiers are upgrading to smaller, but higher quality, ESG-compliant space to enhance conditions for their employees and accommodate hybrid and flexible working.
The biggest transactions all took place in the city’s primary Colmore business district where investors and developers have made significant investment over recent years. The Department of Transport took 22,928 sq ft at The Colmore Building, while accounting firm RSM and civil engineering firm Arcadis downsized, both taking 12,132 sq ft at 103 Colmore Row.
Civil engineering firms represented 33% of the transactions, reflecting growth in infrastructure and the sector’s response to the skill shortage. In addition to Arcadis relocating to Colmore Row, Royal HaskoningDHV, RPS Group, Pegasus Planning Group, RSK Group and Webb Yates Engineers all took new space.
Malcolm Jones, director of office agency at KWB, said: “It has been a fascinating quarter for the Birmingham office market. With just 117,599 sq ft transacted it looked quiet, yet there was a real flight to quality from businesses upgrading to new and refurbished space at record rents to prioritise staff wellbeing, flexibility, and sustainability. Against the backdrop of the Commonwealth Games underway this week, it shows we are a forward-thinking city.
“Looking ahead, we expect demand for high quality city office space to continue, despite current high inflation rates and economic uncertainty. We’re aware of multiple agent-led requirements for 10,000 sq ft and we also expect to see more diversification, with businesses that would have previously chosen out of town offices now considering the city centre.”
