There is a confidence and swagger in Birmingham, with office investment yields in the Birmingham Central Business District and Midlands Logistics having risen to around 5% for the very best 10 year income whilst prime office headline rents in the Central Business District have risen to £32.00 per sq ft with further growth anticipated this year.
The hugely improved arrival experience and leisure amenities following the opening of major infrastructure projects such as New Street Station and Grand Central has propelled Birmingham to the front of the UK's Big 6 regional cities. Birmingham's predicted population growth and the continued swell of online sales will also see retailers rushing to the Midlands to secure urban logistics units in key locations next to major conurbations.
2016 saw The Colmore Building establish a new standard for occupier amenities and 2017 is seeing the delivery of high quality office refurbishments at the likes of 55 Colmore Row, Cornerblock and 1 Newhall Street with others to follow. New significant speculative office developments are also progressing on site at Three Snowhill and Paradise, with delivery in 2019.
Ian Cornock, JLL's lead director in the Midlands, is positive about Birmingham's improving visibility on the world stage.
"Birmingham's profile is at an all-time high. We've invested in our city and infrastructure and as a result have seen a lot of overseas investor attention, particularly from the Chinese, which we expect to continue in 2017."
"The Mayoral elections in May will enable the West Midlands Combined Authority and Midlands Engine to really come into their own, taking control of the finances to push forward with the next wave of investment. For us, the Metro extension is key - we know connectivity is a main driver for investors."
"The city has been buoyed by the confirmation of the long awaited Royal Assent to HS2 which will ensure continued ‘northshoring' to the regions as occupiers look for a more cost effective base for parts of their business."
"Birmingham looks very attractive with investment yields well ahead of most comparable Western European cities such as Barcelona, Cologne and Milan. With main export destinations being the USA and China, the region is also well placed to cope with any uncertainties Brexit may bring. As 2017 progresses, it is expected that global funds and institutions will continue their focus in response to relatively attractive pricing and as more evidence of occupational market resilience comes to light."
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