Birmingham office rents set to soar to new highs
2 July 2015
Unprecedented demand for prime office space in central Birmingham is set to see headline rents rise to new highs of up to £35 per square foot over the coming three years, according to a recent snapshot survey of experts in the region led by Deloitte Real Estate.
Work to transform Birmingham’s skyline with more than one million square feet of new office space is not expected to come on stream until 2018, creating a significant short-term shortage of quality office space and putting increasing pressure on rents.
Edwin Bray, Partner for Deloitte Real Estate in the Midlands, said: “Until major schemes such as Arena Central and Paradise are completed, it’s going to be very difficult to find large open plan floorplates in the city. We’ve seen this reflected in headline rents which have moved from around £27.50 per square foot last year to their current levels of around £30 per square foot. The trend is only going to continue in the coming years as rents soar to new highs.”
The survey was conducted at Deloitte’s annual Midlands Real Estate dinner which was attended by over 50 guests. Speaking at the event, Jon Lovell, who leads Deloitte’s global real estate sustainability practice, explained how the disruptive impacts of climate change, technology and the demands of Millennials have risen up the corporate agenda and underlined the need for developers and building owners to invest in greener, healthier and more agile workplaces.
Jon Lovell said: “I’ve yet to come across a client that doesn’t demand that their project teams drive down development cost; it’s more or less synonymous with the culture of the industry. It’s about time we saw as much gusto given to demanding better performance and impact from the supply chain too. We see and hear a lot of rhetoric about innovation in the property sector, but I don’t see the industry responding anywhere near quickly or strongly enough to the risks and opportunities of environmental, technological and societal change.”
Creating better performing buildings and work spaces also has a role to play in attracting major relocations to Birmingham and the Midlands. An overwhelming 95% of those surveyed by Deloitte expect to see more significant moves from London to Birmingham in the next 12 months, following HSBC’s plans to move its UK bank head office to Birmingham by 2018. Relocations such as this were reflected in the region’s property industry leaders’ support of the Government’s plans to devolve more power to English cities. Everyone questioned agreed that the region should create a ‘Midlands Powerhouse’ to rival other major cities.
Notes to editors
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
Member of Deloitte Touche Tohmatsu Limited.