Mixed message but sentiment improves

Could it be that the worst is over for the Midlands commercial property market? There are mixed messages from offices and industrial but, broadly speaking, sentiment has improved. The most positive view comes from Colliers whose David Smeeton said: “There is no doubt that across the range of market data, the news is more positive than at any time since we began analysing the Birmingham market.”

The research revealed a sharp increase in Grade A office occupation which has been echoed in a marked rise in the demand for top quality space. As a result the availability of offices declined by 3% in the first half year compared with June-December 2009 while city centre was down 15%. The Colliers view is that Birmingham is experiencing a real upturn and that the healthy net absorption rate will continue until 2013.

Smeeton points out that the completion of the Birmingham Development Company’s Cube scheme signals the end of the current speculative development phase. Rents are expected to break out of their current stagnation (down 8.3% in a year) to reach £333.56 a sq.metre (£31 a sq.ft.) by 2013. Smeeton said: “Completed schemes such as Eleven Brindleyplace and 45 Church Street are starting to see significant rises in occupancy levels. In the former it is close to the majority of the floors being let. The accountancy firm Mazars are due to move into 929 sq.metres in 45 Church Street.” CB Richard Ellis’ Ashley Hancox said: “On the positive side, there are signs of indigenous businesses seeking to take advantage of the extraordinary deals available before there is a sustained recovery.

Similarly, a number of larger national/international organisations are reviewing options in the regions as central London supply depletes and rents begin to escalate.” Another positive indicator is the purchase by Hines and Moorfield of five buildings in Birmingham for £200 million in the city’s largest deal to date for a yield of 7-7.5%. The deal was with Brindleyplace Limited Partnership and includes a theatre, bank, restaurant, shops and a car park.

The Midlands Commercial Property Register

The Midlands Commercial Property Register is a leading UK business property publication from Martin Austen Publishing. The aim of the publication is to offer a simple and effective means of finding Offices Space, Serviced Offices and Commercial Property in the Midlands . You can also find the latest commercial property news for the Midlands.