Biggest post-lockdown office deal in Birmingham to boost Midlands city
Birmingham ranks as one of the most important business regions of the UK, and its status has received a further lift thanks to a major commercial acquisition in the city. Often dubbed the UK's second city, Birmingham has added another string to its bow with the biggest office deal seen in the West Midlands since lockdown. The Ministry for Housing, Communities and Local Government has secured 48,787 sq ft of office space in the central B1 building. The letting accounts for more than half of the total 92,472 sq ft of the building.
The government department has taken out a 10-year lease, paying £15.75 per sq ft. This will bring in around £8m a year in rental income. The building's owners, Galliard Homes and Apsley House Capital, are mainly involved in developing brownfield sites into mixed-use schemes. They currently own five sites across Birmingham. They believe the deal is significant in demonstrating the huge potential on offer in the Midlands city. Speaking on the latest office transaction in the city, Chris Duffy, acquisitions and commercial director at Galliard Homes said: “This is a massive commercial deal for Birmingham and the West Midlands, the largest since the lockdown ended.
"The decision by the Secretary of State for Housing, Communities and Local Government department to acquire these premises in B1 underline the importance of Birmingham as the second city in the UK and the capital of the Midlands.” Birmingham's burgeoning business landscape Confidence in Birmingham as an investment space has been on the rise in recent years. A growing number of businesses have chosen the city for office space or even head office relocations. Earlier this year, BT was one of the latest companies to open a new office in the area.
The telecommunications company announced plans to locate 4,000 employees in a new 17-storey building in the centre. The firm cited Birmingham's status as "one of the most rapidly improving places to work in Britain" as a key driver behind the move. “Our new building in Birmingham will bring our people together in an impressive and modern environment, transforming the way we work," said Graeme Paton, BT's managing director of Property and Facilities Services. He added that the office will become a "strategic hub location for BT in the UK".
The number of employees based in the city will increase considerably. Other major businesses to have made Birmingham their home include HSBC, HS2 Ltd, KPMG and Barclays. Big four accountancy firm PricewaterhouseCoopers has also relocated thousands of staff to the city. It plans to add a further 1,000 roles by 2021. Neil Rami, chief executive of the West Midlands Growth Company, commented: “With a rapidly expanding digital infrastructure, large talent pool, and a transport network that connects us to all parts of the UK, the West Midlands remains a highly attractive destination for companies like BT.
” Top housing market potential Birmingham's rising position as a top business location in the UK coincides with its vastly improving housing market. Transport investment has also played a big part in the city's growing appeal, and continues to improve. The city and the surrounding West Midlands is no longer seen as an "emerging hub". According to Mark Evans, head of regional residential development at major estate agency Knight Frank, it is now an "established location in its own right". Both overseas and domestic buyers have been increasingly looking at Birmingham as an investment hotspot.
As a result, Knight Frank has witnessed a growing appetite from developers launching exciting new schemes there. According to the firm's figures, 2019 was a record year for its teams operating in the region. Its residential land and capital markets teams saw £289m worth of transactions over the year. It also found that 4,187 homes were added to the city's housing stock in 2018-2019. This is an increase from 3,160 on the previous year, representing a huge 33% growth rate. “The overall development picture in Birmingham has changed substantially over the past few years,” Oliver Knight, residential research associate at Knight Frank, said.
“The new-build market is maturing, evidenced by the emergence of some of the major housebuilders in the city for the first time." "Sales volumes have also been robust, despite the increased political uncertainty last year, which suggests that well-located and high-specification schemes will continue to perform strongly in 2020 – especially given the clarity afforded by December’s general election result.” BuyAssociation has a range of property investment opportunities available in Birmingham.
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