Birmingham office market sees marginal growth, says report
In 2023, the Birmingham office market showed slight growth according to a report by Savills.
Total take-up reached 703,000 sq ft, surpassing 2022 levels and crossing the 700,000 sq ft mark for the first time since 2019.
The fourth quarter witnessed an increase, hitting 240,000 sq ft, marking a 14% rise compared to Q4 2022.
Key deals in Q4 included housing association Green Square Accord at 10 Brindleyplace and business process management firm First Source Solutions at Tricorn House.
Both transactions, each around 15,000 sq ft, revealed a resurgence in demand for office space on the west side of the city, partly due to the newly extended Midland Metro line.
Ben Thacker, director of Savills Birmingham Office Agency team, said: “Birmingham’s office market showcased resilience in 2023 despite economic headwinds, with a 1% YoY increase and a strong full-year take-up of 702,000 sq ft. We are seeing numerous examples of consolidation taking place, manifesting as inward investment for the city.
“The projected future rental growth and a consistent 4% annual growth rate over the past decade affirm Birmingham as a dynamic and steadfast hub for businesses and investors of all types, attracted by the city’s diverse demographic profile, outstanding transport infrastructure and range of office stock on offer.”
In 2023, public services, education, and the health sector acquired the most space, accounting for 30% of total take-up at 211,000 sq ft. Professional services followed at 18%, with insurance and financial services at 17%.
Notably, 64% of the full-year take-up for professional services occurred in Q4, indicating increased confidence in the market amid the evolving hybrid post-pandemic working environment.
Rental growth remained steady, with headlines at £42, expected to rise to at least £43 by the end of 2024.
Forecasts suggest prime rents will consistently reach £48 per sq ft by 2027, with an average annual growth rate of 4% over the past decade.
Mark Walsh, EMEA head of corporate account management, Global Occupier Services at Savills, said: “We’re seeing many occupiers having a clearer understanding of their real estate requirements post-Covid. Businesses continue to focus their leasing requirements on Grade A offices which have excellent ESG credentials. This has been driven by the desire to satisfy employee needs and ensure staff return to the office, in addition to supporting wider corporate sustainability ambitions.”
