Finance has been secured for a Birmingham city centre office block - set to be the largest ever speculative office development built outside London.
Building work can now begin on the long awaited Three Snowhill development at St Chad's Queensway following confirmation of a £200 million deal between M&G Real Estate and Two Snowhill developer Ballymore.
The deal for the 16-storey office block follows M&G Real Estate’s acquisition of Two Snowhill in 2014 and forms the next stage of Birmingham’s wider Snowhill masterplan, dubbed Birmingham's answer to Canary Wharf.
The 420,000 sq ft development, the final phase of Snow Hill, will create 450 construction jobs and house up to 4,000 office workers when it is completed during 2018. The block will also house shops or cafes at ground floor level. M&G is working with Snow Hill builder Ballymore on the project.
Chancellor George Osborne welcomed the Budget day deal: “We want to make the Midlands Britain’s engine for growth and this landmark announcement will play an important part in that plan.
“Not only will this project initially create hundreds of important construction jobs in Birmingham, the resulting space will play home to businesses with thousands of valuable jobs right in the heart of the Midlands – a vital step in us rebalancing the economy in Britain.”
M&G chief executive Alex Jeffrey added: “Demand from both domestic and international businesses to secure high quality office space in Birmingham has significantly increased, and this is set to rise further with planned infrastructure improvements such as HS2’s Phase One confirmed to start in 2017.
“While occupier demand continues to outstrip supply and push prime rents upwards, Three Snowhill will benefit from low vacancy rates and support our strategy to provide our investors with long-term income-driven growth.”
Three Snowhill is an Enterprise Zone site and is a key development within Birmingham’s Snowhill Masterplan. On completion at the end of 2018, it will comprise 385,000 sq ft of office space and 35,000 sq ft of retail and leisure, housing around 4,000 workers.
Ballymore’s chief executive Sean Mulryan said: “Ballymore committed to Birmingham and the Snowhill scheme over ten years ago. That long term commitment has resulted in the successful transformation of Snowhill into a new and thriving business district - already home to some of Birmingham’s largest office occupiers, including KPMG , Barclays, Gowling WLG (formerly Wragge & Co) and the HS2 Construction Headquarters .
“Three Snowhill will enable us to continue building and letting large floorplate workspace of the highest quality and complete the Snowhill Estate.”
Three Snowhill will front St Chad’s Queensway, one of the key gateways to the city centre. Work had started on an earlier residential tower block on the site in 2008 but this stalled as a result of the economic downtown .
Birmingham’s business leaders have also welcomed the deal.
Greater Birmingham LEP chairman Andy Street said: “Birmingham is becoming a major driver of growth for the UK. M&G Real Estate’s investment in Three Snowhill demonstrates the confidence in the future of our local economy and underlines the success of our growth agenda.”
While council leader John Clancy added: “This is great news for Birmingham and builds on the city’s now established reputation as a leading centre for the business, professional and financial services sector.
“We’re the UK’s most investable city and, with the Masterplan for Snowhill providing a bold vision for replicating the success of places like Canary Wharf together with the £1 billion plus being invested in local infrastructure, it is clear that Birmingham’s attractiveness as a location to invest will continue to grow.”