Birmingham Office Market on the Up

August 2007

Birmingham is fast becoming one of the UK’s best-performing office markets, with industry experts predicting rental growth to out-perform all locations outside London.

According to recent research into the Birmingham office market by Lambert Smith Hampton (LSH), stronger take-up of Grade A office stock has led to a short supply in many locations. The outlook for the office market remains positive as demand for new and high-quality space remains high and pre-letting activity helps to keep availability rates down. Given the improving market conditions, LSH have upgraded their forecasts of rental growth for the office sector as a whole and now expect rents to rise by 8.2% in 2007.

This growth is especially evident in the city centre, where pre-lets for buildings which will be completed in 2008/09 are already rumoured to achieve rental levels of £32 - £33 per sq ft, well ahead of the current record of £30 per sq ft for existing stock.

According to a recent Focus report, employment growth in Birmingham has been between 3% and 4% per annum, supporting the development of additional space. The City has an established skills base in financial and business services that attracts employers and stands to benefit from further relocations in the public sector.

The central Birmingham office market is estimated to contain around 13 million sq ft of office stock and Calthorpe Estates is strengthening this offering with new build office accommodation of the very highest quality, incorporating striking architecture and sustainable design, which Edgbaston is becoming increasingly well known for.

Starting on site in September, Calthorpe House will provide over 100,000 sq ft of Grade A office space, which has already been awarded a BREEAM Offices ‘Excellent’ rating. Calthorpe Estates are also driving forward new office developments at Edgbaston Mill, a new retail and leisure destination opposite Edgbaston Cricket Ground, and Edgbaston Galleries, the £110 million re-development of Edgbaston Shopping Centre. Together these are likely to provide over 220,000 sq ft of additional Grade A office space.

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