Explore Birmingham Offices to Rent
The Birmingham office of commercial property consultant Lambert Smith Hampton (LSH) recently stated that in three or four years’ time, there would be no available Grade A office space available in Birmingham, and only a very small amount of secondhand space.
Because there is so little new office space being built in the near future there will be a scarcity, LSH said. Currently, take up in Birmingham is rising, which is another reason office space will be hard to come by in the future.
Jon Hinton, LSH senior surveyor, said: “Companies wanting to move offices in Birmingham are looking at the four million square feet of space currently available and thinking – wrongly – that they can take their time making a decision. The opposite is true.
“Only 750,000 sq ft of that space is Grade A and there is very little new build in the pipeline. If the average yearly take-up of Grade A space continues at 200,000 to 250,000 sq ft, there will be a dearth of new space in the next three to four years.”
Demand for office space will further increase if the city centre enterprise zone is given the green light, Hinton added. He went on to say that because of the lack of stock rents would increase and rent-free periods would be reduced.
The enterprise zone would entail tax breaks for employers and relaxed planning permission rules.
New employers in the zone would be in line for exemption from business rates for five years which would save them up to GBP 275,000 each.
Editor’s notes: In 2022, the total annual take-up through office leasing deals in Birmingham was 692,700 square feet. This was an improvement compared to 2021 and just 7 per cent below the 10-year average.
Overall vacancy rates in the city were 6.5 per cent, however, the vacancy rate for Grade A office space was just 1.9 per cent, and the new build vacancy rate fell to just 1.3 per cent.
Developers remained active through 2022 with just over 400,000 square feet of speculative space in the pipeline including One Centenary Way.
Three of the four schemes were due to complete in the first half of 2023, however, the continued flight to quality and demand for best-in-class office space could place pressure on the scarce supply.
Prime office rents in Birmingham moved from £38.50 per square foot to £40.00 per square foot over the course of 2022 and if the demand continues, upward pressure will be placed on rental figures.
The green light for the enterprise zone in Birmingham was given the green light in 2012 and further details can be found here.