Skip Ribbon Commands
Skip to main content

News Release

FEATURE ARTICLE

Investors head in search of smaller cities for capital growth

JLL highlights Solihull as a well-established growth story


BIRMINGHAM, 14th May, 2015 - Rising capital values and strong competition are now driving investors to look beyond the major UK cities for quality office stock and potential value.  A new report from global property consultancy JLL has analysed the economic and office market performance of 37 smaller towns and cities giving an insight into which locations will offer the biggest opportunity over the next five years.

JLL's 'Where Next in the UK?' report shows some smaller cities are found to have a stronger outlook than the Big 6 - Bristol, Birmingham, Manchester, Leeds, Glasgow and Edinburgh.

In the West Midlands JLL highlights Solihull as a well-established growth story - a 'growth leader' - placed 11th in an economic ranking of 37 shortlisted cities. (cities being referred to as a generic term and determined by population size). Growth leaders are those that have seen capital value increases of over 25 per cent since the end of 2012 with stronger than average economic performance expected over the next five years. 

Coventry (17), Telford (19), Walsall (27), Wolverhampton (29) and Dudley (30) are also mentioned in the report, all ranking within the top 40 in the categories of potential performers or awaiting lift off. In fact the West Midlands has the highest proliferation of small cities ranked.

So what can make these smaller cities a success? Ian Cornock, lead director at JLL says it is closely associated with their ability to develop and grow clusters of businesses, along with strong university links and the provision of integrated transport and infrastructure.

"Business Clustering is a key driver of success for both cities and business parks. Solihull benefits from both a strong town centre and two successful and well-established business parks alongside the M42 Corridor including Birmingham Business Park and Blythe Valley, attracting high value added knowledge intensive sectors.
Solihull sits at the centre of a world-class automotive industry prominent within the wider Greater Birmingham city region. Jaguar Land Rover (JLR) has a factory in Solihull itself and its HQ in nearby Coventry, BMW operates an engine plant just north of Solihull and Rolls Royce is currently constructing a new advanced manufacturing and technology facility at Birmingham Business Park.

"To help develop these clusters,” adds Cornock. "It is essential to have collaboration between key stakeholders of the business community, local authorities and local educational institutions in order to facilitate the strong cluster growth that will drive future success."

Devolution will clearly help with this and for Solihull there are distinct advantages of being situated close to a major city such as Birmingham and the increased collaboration it brings.
"For example," Cornock says. "It is essential Solihull works closely with Birmingham and the major educational institutions and universities in the city to ensure the right supply of skills and labour they require to further its business clusters and create employment and investment opportunity.

"The UK Central brand is also particularly strong for Solihull and gives a very clear message to investors about its potential for future growth."

The UK Central brand was adopted by the Greater Birmingham and Solihull Local Enterprise Partnership (LEP) in 2013 to highlight the number of infrastructure assets around the Solihull part of the city region and its high level of connectivity and is accompanied by a master plan for the period up to 2040.

"An integrated transport infrastructure is one of the most critical considerations for any city in the UK looking to attract investors." says Cornock. "Whether it is new tram lines or improvement of internal road systems, with increasing urbanisation the extent and quality of transport linkages will be vital in shaping the future growth of cities."

Larger scale schemes such as HS2, HS3 and the electrification of the Great Western mainline, are vital longer-term drivers of growth for affected cities, but the internal public transport networks in and around these cities are also vital for commuting and day-to-day business operations.

Cornock continues. "The ability for cities to address the ease of movement for both individuals and businesses will have an effect on their ability to attract and retain the people who will drive future success in a fast changing and more urban landscape. Once again Solihull ticks many of the boxes for infrastructure.

"Clearly it is prudent for investors and developers to focus on value-added opportunities where they can reposition assets to benefit from the value growth already seen in the Growth Leaders category. From an occupational perspective, costs may be higher than in the potential performers or those awaiting lift off, but these markets are likely to offer more established clusters of clients and competitors and of course attract the best skills."