The Birmingham office market has seen a strong start to 2024 and could see transactions return to pre-Covid levels. We spoke with one of our partners, Charles Warrack, Head of Office Agency, to learn more about why there has been a significant increase in the amount of office space taken up in Q1 of 2024 compared to Q1 of 2023 and how this shows that confidence is returning to the market.
Charles said: “Many office occupiers now operate a hybrid working policy, businesses are still looking to take up space, with prime buildings with high-quality amenities being the first to let.”
Figures from the Birmingham Office Market Forum, made up of property agents across the city, show that the central Birmingham office market take-up figures for Q1 of 2024 totalled 203,385 sq ft across 20 deals. This compares to Q1 of 2023 which stood at 153,550 sq ft across 18 deals.
Charles added: “These figures show an incredibly strong start to the year, and mirroring the final quarter of 2023, we continue to see media and education represented significantly in these transactions.
“However, I do think that we will see a shift away from the education sector during 2024, and I’d predict that we will see an increasing number of professional services businesses taking up space.
“On the whole, we are seeing prime Grade A office space being let first as not only are businesses looking to make their space more attractive to staff as they strive to recruit and retain the best talent and tempt them back into the office, but workers are also beginning to see modern office space with add-ons such as café facilities and a nearby gym as the norm.
“Even those occupiers looking to downsize and take up slightly less space due to hybrid working patterns are still happy to pay more for premises as the flight to quality continues.
“It is also being recognised amongst major landlords who are aware that they may need to make significant investments into their buildings to make their spaces lettable, and as a result, we are seeing several comprehensive refurbishments taking place across the city.
“These refurbishments are also considering environmental credentials as we see an increasing number of occupiers demand better ESG credentials from their buildings. Landlords are picking up on this and are now looking to ensure that their buildings have the best EPC ratings and sustainability specifications possible.”
Despite a general election on the horizon, Charles added that this may well have a positive effect on the market. He said: “I’m cautiously optimistic and we may well see a return to pre-Covid levels in 2024.
“They say confidence breeds confidence, so, with interest rates under control and forecast to come down and inflation rates under control, it is looking extremely positive. Although the political landscape may well change this year, I actually believe this will shake things up and give the market a boost.”
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