Birmingham’s office market will bounce back following the easing of coronavirus lockdown restrictions, according to new research.
Property consultancy Knight Frank says that, despite the virus halting large parts of the office market in the city, there is plenty of investment capital waiting in the wings.
The agency also suggests there is a live requirement of more than 670,000 sq ft from occupiers for space in Birmingham city centre.
The findings come in Knight Frank’s latest Insight report published by the firm’s Birmingham team which covers the first three months of 2020 and examines the state of both property investment and office take-up.
The report says elevated volatility in the financial markets is resulting in a flight to safety, meaning the appetite of investors for long-income commercial property products in the city will increase further.
The Birmingham Apprenticeship Awards are back for a second year, in partnership with the Ladder for Greater Birmingham. The event will be held on Friday November 27, 2020 at Edgbaston Stadium and will celebrate apprentices, employers and training and education providers.
The awards are free and easy to enter via our online form which can be found here along with those all-important T&Cs. The deadline for entries is Friday July 3.
If you have any questions about entering or the awards in general, please email firstname.lastname@example.org and contact email@example.com if you would like to learn more about becoming a commercial partner of the awards.
For more information visit our events website here and please follow the hashtag #BAA20 for updates on social media.
Ashley Hudson, head of Knight Frank’s capital markets team in Birmingham, said: “2020 got off to an encouraging start which saw investors return to the market with confidence amid increased political and economic stability.
“As a result, many domestic funds gave the green light on buying requirements formerly put on hold due to drawn-out Brexit negotiations and the general election.”
Knight Frank’s report said there was some activity in Birmingham as 55 Colmore Row went under offer to Union Investment for around £105 million.
The proposed sale to the German investor provided strong evidence that European institutional capital was re-entering the market, the firm said, while Credit Suisse commenced negotiations with Kier Property to forward fund an office development at Arena Central.
Mr Hudson added: “After a month or so of positivity, the threat of the virus started to have an impact initially on overseas capital and today has brought almost all investment activity to halt while the country is in lockdown.
“We are aware of a number of assets in Birmingham city centre that were being prepared for sale by vendors.
“However, these sales will now be put on hold until normal play is able to resume.”
Examining the state of the occupier market, the new report said that take-up in the Birmingham office market enjoyed “the perfect start” to 2020 following the announcement in January of BT taking 283,000 sq ft at Three Snowhill.
Overall, central Birmingham office lettings totalled 338,985 sq ft over 16 deals in the first three months of this year.
Jamie Phillips, who heads Knight Frank’s office agency team in Birmingham, said: “With many of these transactions taking place before the arrival of this pandemic, the true effect will not be felt until the figures for Q2 2020 are announced.
“Although the economy has undoubtedly halted due to covid-19, we believe this will only be felt in the short-ish term as the fundamentals are strong and therefore we believe the medium to long term outlook for the office market in Birmingham remains positive.
“We have also seen evidence from several occupiers who are continuing with their relocation or expansion plans regardless of covid-19, clearly seeing this as a minor setback rather than anything longer term.
“Although some sectors such as hospitality, retail and travel are being severely affected, there are several sectors such as TMT and pharmaceutical businesses that have seen a significant increase in business activity.”