The office market recovery in the West Midlands is being powered by a huge upsurge in demand in the M42 corridor – with firms from London and overseas clamouring for space.
The eagerly-awaited upturn in the region looks set to be led by the out-of-town market, according to leading real estate company Cushman & Wakefield.
Scott Rutherford, head of Cushman & Wakefield in Birmingham, said that the M42 corridor was experiencing a major upsurge in demand, a trend mirrored by the Thames Valley market, currently the hottest outside London.
“The performance of the office market in Birmingham city centre has been improving,” he said.
“But there has been a huge rise in demand for space in the M42 corridor, where there are currently three or four requirements for between 40,000 and 50,000 sq ft, which is unheard of.
“Traditionally, requirements for this market have been under 10,000 sq ft, with no deals exceeding more than 20,000 sq ft.
“But at the moment, in addition to the three or four major requirements, we have two office deals under offer for more than 25,000 sq ft of space.”
Mr Rutherford said the increase in demand for out-of-town space was being led by a broad range of occupiers, rather than traditional office occupiers such as professional services sector businesses.
Among these are technology firms and businesses looking to relocate from central London, or even abroad.
Birmingham and the West Midlands is becoming a popular destination due to such diverse factors as quick and easy access to 90 per cent of the UK market, more languages spoken than any other major English city, access to 18 universities and 105,000 graduates within an hour’s drive time, and proximity to London.
“There is evidence of potential occupiers looking at Birmingham, Manchester and Glasgow as locations for contact centres and we are also seeing signs of competition for space in the out-of-town market, which is highly unusual,” said Mr Rutherford.
He said the demand for out-of-town offices was already leading to a shortage of good quality space in the M42 corridor and other locations. Last year, a total of 224,395 sq ft of space was taken up by the M42 corridor, with just four deals exceeding 10,000 sq ft.
