This year will see record levels of investment pouring into Birmingham as the UK’s second city experiences a much-anticipated and long-overdue renaissance.
The city is reinventing itself on the back of multi-billion-pound infrastructure projects, led by the £50bn HS2 high speed rail link. The heavyweight project will prompt the development of two stations: the main terminus on Curzon Street in the city and an interchange station at Birmingham Airport.
A new Birmingham Curzon masterplan covers the 348 acres surrounding the proposed HS2 terminus, incorporating 8.2m sq ft of new commercial space and 2,000 homes prior to the first trains running along the track in 2026. Couple this project with the £600m redevelopment of New Street Station, which opened last month, and the extensions to the Midland Metro tram line and Birmingham Airport runway, and it is easy to see why Birmingham has risen phoenix-like from the ashes of the recession.
On the back of this huge investment comes the city’s retail transformation. This year the retail landscape in Birmingham changed forever. As New Street opened, so did the 500,000 sq ft Grand Central shopping centre, which sits above the station. John Lewis has just opened its £35m, 250,000 sq ft flagship regional store at the mall.
On the same day as the opening, news broke that Hammerson was the preferred party to buy Grand Central, with a bid of £325m – a yield of just under 4% – representing a huge vote of confidence in the city from the owner of the neighbouring Bullring shopping centre.
Nearby, a £50m makeover of the mixed-use Mailbox scheme has also helped to refresh the city’s retail offer with a 40,000 sq ft Harvey Nichols store, new shops, bars, offices and restaurants. Birmingham is now the only city outside London to have the “big five” department stores: Selfridges, John Lewis, Harvey Nichols, House of Fraser and Debenhams.
The city’s track record in large-scale office development and lettings has also been impressive, with a number of high-profile relocations from London. Earlier this year, HSBC announced its relocation out of London’s Canary Wharf and into its new 210,000 sq ft UK retail banking headquarters at the 2.3m sq ft Arena Central development. HSBC follows Deutsche Bank, which relocated 1,500 staff from London in 2013 to take advantage of Birmingham’s pool of skilled workers and lower cost of living. These financial occupiers join HS2 Ltd, which relocated its UK HQ from London to Two Snowhill, where 1,200 staff are based in 100,000 sq ft.
A barrage of office development is taking place across the city as investors and developers look to cash in on Birmingham’s affordability compared with London and the South East and take advantage of the city council’s can-do approach to planning.
Schemes include 1.8m sq ft being delivered at the phased Paradise project, while the £600m Snowhill masterplan has recently been given the green light for a further 2m sq ft of space. A further 400,000 sq ft is planned at Three Snowhill, the final phase of the 1m sq ft Snowhill regeneration project.
All this activity has sharpened the focus of overseas and UK investors on Birmingham, which has produced unprecedented levels of investment activity. The city is set to top a record £1bn of commercial property investment deals by the end of this year.
