Birmingham office rents expected to reach £31 a square foot – Savills
RESEARCH from property consultancy Savills suggests Birmingham’s office market will see top rents rise by 3.3% to £31 per sq ft before the end of this year.
The firm reports that the strong occupational demand of 2014 continued into the first quarter of this year, with take up 26.4% higher than Q1 2014 at 129,000 sq ft
As a result, the outlook for top rents remains positive with forecasts beyond 2015 pointing to longer term average growth of 2.8% per year.
Savills also draws attention to an increasingly narrow gap between rents for new build and refurbished space, with the Grade A/Grade B differential coming in at 28.2% in Q1 2015 compared to 78.1% in Q1 2011.
With the development pipeline set to remain constrained over the next two years, there is likely to be strong rental uplift linked to asset management opportunities.
Standard Life’s £4.5m refurbishment of 42,000 sq ft and entrance redesign at 19 Cornwall Street, which is due for completion this month, is a key example, Savills suggests.
Nick Williams, office agency director at Savills, said: “The year is off to a flying start following an exceptional 2014 which was dominated by demand from public services, education and health occupiers.
“With HSBC’s recent commitment to Two Arena Central, the return of banking requirements is likely to make itself felt and lead to another strong year for Birmingham’s office market.”
