Birmingham 's office market boom set to continue - report

Birmingham 's office market rallied in 2021 and will continue to do so this year, according to data from real estate advisor Avison Young.

Avison Young 's latest Big Nine office market update says city and out-of-town office transactions reached 925,000 sq ft in 2021 and are expected to return to the five-year average by the end of 2022.

In the city centre, deals totalled 657,000 sq ft in 2021, up 26 per cent on 2020, while the out-of-town market achieved a sizeable 52 per cent increase on 2020 with a take up of 268,000 sq ft.

A surge in activity in Q4 bolstered Birmingham 's 2021 figures.

Continued demand for quality space came from the professional services sector, with the largest letting at 103 Colmore Row, 32,900 sq ft to lawyers Shoosmiths, also joined by financial adviser Grant Thornton with 12,146 sq ft and Knight Frank with 4,300 sq ft. Other well-known firms such as Arup and Atkins also acquired new grade A space in the city centre in 2021.

Similarly, out-of-town deals and activity were dominated by professional and business services in 2021. Highlights include facilities management firm Mitie taking 32,848 sq ft at Trinity Park, while Citibase and Rivus Fleet signed up for 27,764 sq ft and 11,700 sq ft respectively at Birmingham Business Park.

Outside key deals, demand for serviced office provision across the city and out-of-town markets continued. Demonstrating this was flexible workspace provider x+why 's investment in Birmingham, with 34,500 sq ft at 103 Colmore Row and 40,616 at Brindleyplace, seeking to capitalise on occupiers ' increased desire for high quality and flexible space in the city.

George Jennings (pictured), director at Avison Young, added: “There was a significant improvement in office activity in Birmingham city centre last year, with the market once again showing strong resilience and adaptability.

“What remains is the desire and need for quality office space, across the UK, and Birmingham is fortunate in the fact that it has an abundance of Grade A supply already in and coming to the market over the coming year, meaning we 're unlikely to see a drop in the momentum of the city and out-of-town markets in 2022.

“Looking ahead, there continues to be a real drive for quality. Yes, companies are taking less space, but we are seeing more and more businesses wanting the office culture back! By the end of 2022, it is looking like take-up will be back to the five-year average, as long as we continue to navigate our way through the pandemic as we have been doing. ”

Adrian Griffith, principal at Avison Young, said: “Due to the ongoing pandemic the first half of 2021 was immensely challenging, but towards the end of the year as we moved into Q4 there was a distinct uptick in activity, which we predict will continue throughout 2022.

“As occupiers start to learn and adapt to the new way of working, focusing on bringing their office spaces back to life, we fully expect to see an improvement in the office market and an increase in activity. ”

Read the full report.