Prime office rents in Birmingham are set to increase from their standard £28.50 per sq ft rate for the first time in more than three years, it has been revealed.
Research from property consultancy CBRE shows that headline rents in the city have been constant since December 2010 – but an upturn is now on the cards.
Ashley Hancox, a senior director in CBRE’s offices team, says the long period of inertia is set to change, with a £30 per sq ft headline now a realistic proposition.
Birmingham is not the only regional office market to have seen nil or slight growth in rents over the last few years. Rents in Bristol have remained static at £27.50 per sq ft since June 2007 while in Glasgow office rents have been stuck at £27 per sq ft.
Ashley said: “As far as Birmingham is concerned, we are looking at the imminent prospect of rental growth.
“Our historical data shows that rents in Birmingham have peaked, then dropped, then surged back above previous peak levels as a result of a severe shortage of Grade A choice, which is now a very real prospect in the city.
“The pre-recession peak of £32+ is probably artificially high: it was achieved on just two developments – Two Snowhill and Colmore Plaza.
“But in my view the £30 threshold is now within easy reach.
“Landlords have begun to take a harder line: with prime stock depleting they are in a much stronger position and confident enough to reduce incentives,” added Mr Hancox.