Grade A office take-up in Birmingham fell by more than in any of the country’s top 10 regional cities in the third quarter of this year.
According to Knight Frank’s latest Regional Offices Market Report, the city reported an 82% drop in total space let compared with Q2, transacting just 90,779 sq ft between July and September this year.
Manchester topped the table with 379,976 sq ft of deals done in Q3. Other cities included in the research were Aberdeen, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Manchester, Newcastle and Sheffield.
Knight Frank partner and Birmingham head of office agency Jamie Phillips said that although the statistics are disappointing, he believed they were a blip rather than a downward trend.
“It’s important to put these figures into context. The city put in a stellar performance in Q2, when more than 520,000 sq ft of transactions were completed, higher than any other regional city,“ he said.
“What’s more, 741,318 sq ft of take-up in 2015 to date has already outstripped 2014’s 713,460 sq ft. There is no need for panic.”
The KF report said that occupiers were seeking 945,000 sq ft of grade A space in Birmingham, more than any other regional city. Across the 10 regional cities listed, 4.5m sq ft of active requirements were recorded in Q3, with a fifth of the total focused on Birmingham.
Phillips added: “This level of enquiries obviously raises hopes of a strong finish to 2015. But however the stats pan out for this year, we have a strong pipeline going into 2016.”
While Birmingham’s occupier market was subdued in Q3, the investment market was firing on all cylinders with £315.2m deals complete in Birmingham, including the sales of Colmore Plaza and 1 Colmore Square, while Manchester transacted £204m.
KF said that total turnover in the regional investment market for the year to date standing at £3.1bn, the highest since 2007. The research showed that investment volumes in the regions in Q3 reached £1.05bn, with Birmingham and Manchester accounting for nearly half of that.
Ashley Hudson, head of investment at KF in Birmingham, said: “Investor appetite for regional office stock is continuing. Birmingham has been in the national spotlight recently. With the delivery of Grand Central and New Street Station, it is important that we continue to press home the attractions of the city to ensure we remain top of investors’ shopping lists.”
