A recent report by Colliers International on the Birmingham office market over the last 6 months, painted a picture of rising office take-up driven by occupier expansions and falling availability of office stock in the city.
The city is riding high after the announcement of HSBC’s (210,000 sq ft) relocation of 1,000 London staff to the Arena Central scheme in 2019. Office take up of 340,000 sq ft in the second half of 2014, took the yearly total to over 713,000 sq ft for the year, with over 70% of deals in the core area. Large recent deals include HS2 (97,958 sq ft) at Two Snow Hill, HSBC (37,530 sq ft) at 120 Edmund Street BCU (27,000 sq ft) at NTI Building, BDO (24,307 sq ft) also at Two Snow Hill and Weightmans (14,000 sq ft) at St Phillips Point.
Financial (notably Deutsche Bank) and public sector occupiers (mainly skewed by HS2) were the most active in 2014, but the year also saw deals to Vodafone, Hogan Lovells and Amey. There is about 500,000 sq ft of office requirements circulating in Birmingham at the moment. Metropolis is tracking around 30 medium/large searches in the city including PKF Cooper Parry, London School of Business & Finance and Birmingham Chamber of Commerce amongst others.
In terms of development, Rockspring and Sterling Property Ventures are planning redevelopment of 103 Colmore Row to produce an office scheme of 225,000 sq ft. Bruntwood has purchased the former KPMG Headquarters at 2 Cornwall Street and will begin a major refurbishment and extension of the building this year.
Looking ahead, the city is increasingly garnering mid-level banking operations from London, with Lloyds Bank the latest rumoured to be interesting in boosting its presence in Birmingham. The lack of new schemes and grade A office space across the city is now likely to trigger enquiries from a number of occupiers. There are also over 100 lease expiries due to be resolved by Birmingham tenants over 2015 and 2016.
Hines development at Two Snow Hill is scheduled to reached 'Cat A' status this month. Balfour Beatty has been the main contractor for the 28,335 sq m (304,996 sq ft) office scheme. The fit-out for Wragge, which has pre-let most of the building, is scheduled to begin soon and finish in 2014.
Abstract Land will 'absolutely not' be starting work on its redevelopment of 55 Colmore Row, Birmingham B3, this year. The developer has planning consent to add 1,858 sq m (20,000 sq ft) of office space to create a £30m 14,214 sq m (153,000 sq ft) office scheme. However, the building is currently occupied by law firm Wragge & Co and the fit-out of Wragge's new office hasn't even started. Abstract does intend to redevelop the site and has planning consent for another seven years and recommends getting in touch every six months for updates.
Liberty Mutual Insurance (LIM), part of the US insurance group, has relocated its Birmingham office to 210 sq m (2,247 sq ft) on Floor 7, at Standard Life’s 45 Church Street, Birmingham, B3 2RT. OBI Property advised.
Connaught Square, part of the Irish-based company Naus Group, is in administration. The developer had been planning a £150m mixed use redevelopment of Birmingham Coach Station to be renamed Rivercross. But the plans for shops offices, residential and a hotel are now in jeopardy.
Demolition work has started at Chord Deeley's £160m St Georges Scheme. Birmingham based demolition contractor DSM has been appointed to carry out clearance work, and internal stripping out works at the Kettleworks has begun. The £55m conversion of the Kettleworks is part of phase 1 of the development, and will include conversion of the former factory into office and retail space.
Henderson Global Investors has been granted permission for the redevelopment of 55 Temple Row, Birmingham B2. The developer plans to create a new landmark building comprising 16,196 sq m (174,334 sq ft) of office accommodation and 1,661 sq m (17,879 sq ft) of street level retail/restaurant space. Demolition of the existing building is expected to take place in October 2009, with construction start on site scheduled to begin in March 2010. Completion is anticipated in December 2011.
Wragge & Co has confirmed its pre-let of 23,226 sq m (250,000 sq ft) of office space at No 2 Snow Hill, the second phase of Ballymore's 92,902 sq m (1,000,000 sq ft) development. The law firm will take occupation of 11 floors of the 14 storey building in 2011. Completion to shell and core is expected in mid 2010.
Kenmore Property Group has been granted planning permission by Birmingham City Council for a 29-storey tower at 1 Snow Hill Plaza. The Scottish property developer is expected to start work in early 2009 on its 66,890 sq m (720,000 sq ft) scheme in Birmingham city centre, with completion expected in 2011. The new tower will be the largest in the UK outside London. The £230m development will include 40,000 sq m (430,000 sq ft) of offices, 1,486 sq m (16,000 sq ft) of leisure and retail space and 175 car parking spaces.
Calthorpe Estates has begun demolition of the existing 17 storey tower at Edgbaston Galleries, Hagley Road, in central Birmingham. The 39,437 sq m (424,500 sq ft) development will include 14,800 sq m (159,300 sq ft) of Grade A office space. The first phase is due for completion in 2010.
Outline planning consent has been granted for Calthorpe Estates £110m mixed use Birmingham development, to be known as "Edgbaston Galleries". Following demolition of the existing Edgbaston Shopping Centre, a 39,437 sq m (424,500 sq ft) scheme will be created, which will include a 4,794 sq m (51,600 sq ft) foodstore, 5,295 sq m (57,000 sq ft) of retail and leisure space, two hotel buildings and 14,800 sq m (159,300 sq ft) of Grade A offices. The development will also offer 800 car parking spaces. Calthorpe hope to make a start on site this year, and estimate completion in 2010. DTZ are letting agents.
Construction of Calthorpe Estates's £40m Birmingham office scheme, to be known as Calthorpe House, will start this year. Demolition of existing buildings on site has now been completed, making way for a 9,476 sq m (102,000 sq ft) office building, which will provide floorplates of up to 2,044 sq m (22,000 sq ft). Completion is anticipated for mid 2009. DTZ are letting agents.
Frontier Estates has just launched Temple Point, the refurbishment of the former Windsor House in Temple Row, Birmingham. The project reached practical completion in late June 2006 and provides 6,218 sq m (66,930 sq ft) on eleven floors. The letting agents are Knight Frank and GSD.
George Wimpey City has gained planning consent for a £30m scheme in central Birmingham. The mixed-use project in the Chinese Quarter in Bromsgrove Street is close to the Bullring complex. It will include 183 apartments and 1,100 sq m (12,000 sq ft) of commercial space. The scheme was designed by Cardiff-based architects Powell Dobson.
Enabling works on Miller's Arena Central development will begin this autumn with construction getting underway during mid 2007. The development will provide approximately 45,650 sq m (500,000 sq ft) of office and residential premises.