Manchester-based developer Nikal will offer a 20% discount in costs to potential occupiers of Exchange Square, the second phase of its £600m Masshouse scheme in Birmingham, in a bid to kick-start development.
Nikal is seeking a 50,000 sq ft prelet to get the scheme underway. It aims to lure potential tenants by undercutting rival schemes in Birmingham’s central business district.
James Payne, development director at Nikal, said: “We will guarantee that occupiers will pay 20% less costs here than anywhere in the CBD – that covers rents, service charges and so on.”
Headline rents in the CBD are between £25 per sq ft and £27.50 per sq ft.
Nikal officially launched the Exchange Square project today, pitching it as the first office development to get out of the ground in Birmingham in the past five years, apart from Two Snowhill.
Payne said: “Paradise Circus is great, but it’s still years away. We can deliver very quickly. It’s a cleared site, the infrastructure’s in place and we’ve got consent.”
The city is facing a shortage of grade A office stock and a potential gap in the pipeline of large floorplates between 2013 and 2018.
Nikal is in talks with potential tenants but no deal is imminent.
Various office requirements are circling the city, including 50,000 sq ft for Brindleyplace-based solicitor DAB Beachcroft, advised by Savills.
At Exchange Square, a flexible planning consent for 550,000 sq ft net internal of offices will be divided between two buildings around a new public square. A 200-bedroom hotel is also proposed.
Payne explained: “The two proposed office blocks are at the moment 180,000 sq ft in size for the first phase with 16,500 sq ft floorplates. The second phase is 240,000 sq ft with 20,000 sq ft floorplates.
“This is a moveable feast. The consent can offer a building of 90,000 sq ft up to 370,000 sq ft if required.”
Jones Lang LaSalle and GBR Phoenix Beard are lettings agents.
lisa.pilkington@estatesgazette.com
