Birmingham city living market on the way back – CBRE

BIRMINGHAM’S city living market is poised to resurrect following five years of dormancy, according to property consultancy CBRE.

Adrian Willet, a director in the development team at  Birmingham-based CBRE, said no fewer than six major city centre development sites earmarked for residential development before the recession hit are being resurrected following the upturn in both land and house prices.

The developers who own the sites are all looking to sell or join forces with house builders to take their schemes off the drawing board.

And Willet said he understands that there are other residential development proposals being dusted down.

He said: “Whilst it’s probably premature to call what we are now witnessing a trend, I suspect we are on the cusp of one. It’s more than coincidence that these sites have come across my desk in the last six weeks.”

However, Willet believes that developers are likely to downscale their original schemes.

He said: “The investor clubs which provided advance income and certainty have all but disappeared, and the banks remain cautious. Developers will potentially press for an element of deferment  on land payments, which means that vendors will realise a smaller land receipt in the short term, and in some instances may have to look at joint venture arrangements and other innovative deal structures.

“Whilst developers will be keen to maintain density levels, in order to maximise values, the reality is that financing bigger, riskier builds remains challenging. As a result, the skyscrapers planned pre-recession are more likely to be more modest, sub-20 storey projects.”

Willet said he is aware of a couple of volume house builders who have indicated that they will look afresh at city living, as well as certain private developers.

“We are now starting to see the PRS specialists scouring the city for opportunities. There is no doubt that the resurgent housing market and the buoyant private rented sector are fuelling appetite.

“Developers can also expect to have the support of the local authority. Birmingham City Council simply can’t deliver sufficient two storey suburban homes to meet its stringent housing targets and even a handful of higher density city centre schemes will make quick inroads into easing the housing numbers.”