We caught up with one of our partners, Charles Warrack, who works in our commercial agency team based in our Birmingham office, to learn why he believes that the increase he is seeing in office deals being completed is a positive sign that the office market in Birmingham is on an upward curve after a strong end to last year.
“This trend is not only being driven by central Birmingham continuing to be an attractive location but was also down to new players in the education sector coming into the market and serviced offices becoming more attractive.
“The final quarter of 2023 saw the highest take-up of office space in Birmingham since before the pandemic, and the signs in Q1 of this year are that this upward curve will keep going. It is encouraging that the market dynamics are continuing to show similar patterns to before the pandemic - where the ‘bread and butter’ of the market is transactions between 1,000 sq ft and 10,000 sq ft; and with the 2023 transaction statistics showing that in terms of size, 48 per cent of the office take-up was in the 20,000 sq ft plus size range.
“As has been the trend for the last year or so, offices fitted out to a high standard are still seeing high demand from occupiers who want to provide an excellent working environment for their staff in the hybrid model of working which has become the norm for many companies. However, we are increasingly seeing the educational sector, such as organisations in further education, higher education, and specialised firms, looking to acquire office space in Birmingham for their operations alongside the usual professional service companies.
“For example, Global Banking School took significant space at Norfolk House in one of the biggest deals of October last year, and we expect more deals like this to be completed in Q1 and Q2 2024. Furthermore, the serviced office industry is performing better as more companies look to move into space on a short-term basis to benefit from a central presence while retaining flexibility should they wish to move again.
“We are also seeing more and more landlords looking to offer tenant-ready office space that requires minimal fit-out from occupiers. Office space that is already fitted out to a high standard in a good location attracts a lot of demand,” he added.
“A lot of occupiers are happy to pay a higher rent to move into a high-spec office, and landlords are increasingly willing to put the work in to attract these tenants.”
Despite a looming election, Charles remains confident the office market will perform well in Birmingham into the rest of the year.
He added: “Confidence among landlords and occupiers is growing, and with interest rates and inflation both expected to stabilise soon, we think the office market in Birmingham is in a good place. Refurbishments from landlords and the convenience offered by serviced office providers are making offices more attractive in terms of quality and price, and the education sector has become a new force in the market. Q4 2023 showed that the Birmingham market is showing resilience, and we think that 2024 will hopefully carry on in the same vein.”
