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Opportunities beckon - but challenges remain

says Nurton's Rupert Young and JLL's Carl Durrant

BIRMINGHAM, 20 December, 2016 - The HS2 Bill may now have all but received Royal Assent, but debates about the merit, cost and precise route of Britain's controversial high-speed rail project will continue to run.

However, there are no qualms about the proposals to be heard in Nurton Developments' office in Birmingham's Waterloo Street - or about the city's strategic direction of travel.

“I've been back in Birmingham for just over 21 years, and have never felt more positivity from the business community about what is happening here,” says Rupert Young, Nurton's development director.

“This is not just from people based in the city, or those of us in the property sector. When I talk to my long-term contacts in London, the south-east and other regions, they have the same upbeat opinions about Birmingham, as a place to work, to live and to invest.

“I hear all the time, from senior people in Birmingham, that London based professionals are ever-more receptive to the idea of coming to Birmingham.

“At Nurton, we see HS2 as a once-in-a-generation opportunity to transform our ageing rail network, increase capacity on the West Coast main-line and strengthen the links between Birmingham and London.

“We saw even before Grand Central Station opened how it was changing perceptions about the city, not just here, but overseas, and the same is true for the runway expansions and new services at Birmingham Airport. Investors love locations which invest in infrastructure and have long-term strategic visions.”

However, Nurton's Young does identify several issues which could restrict the city's potential for growth in the immediate future and into the long-term.

“It's not just about putting in the right infrastructure, it can be about changing the role of existing infrastructure, and although I'm no fan of privatisation in general, I think the case for bringing the M6 Toll back into public ownership is very strong,” he says. Get HGVs on there and release space of cars on the M6.

“From the perspective of both investors and tenants, we must also ensure the growing demand for city centre office space is capable of being. The wider business community needs to focus on giving our next generation (the youngest of any major European city) the skills they need to stay here and to prosper.

“Equally, although the trend for relocation here from London and the South-East is very heartening, we need to continue to provide better leisure and housing opportunities. Even though the office supply pipeline has been improved, there are other sectors where requirements are running well ahead of available space. Identifying new sites for employment development is just as important as finding those for housing and other uses.”

Carl Durrant, JLL's Birmingham-based director (industrial and logistics) agrees, and suggests that the Greater Birmingham business sector which needs most new space, and in chunky amounts, is the one which appears the most buoyant.

“We've all seen the tremendous success which JLR has achieved in the last few years, and the huge employment benefits which that has brought to the West Midlands,” he says.

“However, those headlines do tend to mask the fact that we are running short of modern and flexible industrial space, for manufacturers, retailers and distributors. Yes, there are some Big Box schemes coming forward on a speculative basis, but we do need more, and we also need newer and smaller units.

“If this space isn't delivered in the next year or two, then our regional economy will miss out, not just on the wealth and employment which these schemes will create, but on the potential for them to be acquired by overseas investors and the institutional funds.

“In the first half of 2016, the two biggest shed investments were Mountpark Bardon, near J22 of the M1, going for £120m, and the Argos national distribution centre at Barton Business Park, near Burton-on-Trent going for £74.65m, so investors remain keenly aware of the strong fundamentals for the Midlands.

“However, we do need to focus on delivering the next generation of Big Box units in this region, to ensure that we maintain our present place in the eye of potential investors.”