The Birmingham office market remains active according to Knight Franks’ Regional Office Market Presentation (ROMP).
Knight Frank’s online interactive tool provides detailed market comparisons of key regional UK cities from 2002 onwards and is updated quarterly to enable the company’s clients to track market performance.
It found Birmingham achieved the highest prime rent per sq ft out of all regional markets at £33.50 by the end of the third quarter thanks to the Barclays and Wragge & co deals which both pre-let office space at Ballymore’s Snowhill development, the first phase of which will complete in 2009.
Mark Swallow, head of Knight Frank’s Birmingham office, said: “This year we have also seen a significant number of smaller deals in the city centre which should mean 2008 sees record take-up in the city centre. There is still a good level of construction activity in Birmingham on existing sites and there is a reasonably optimistic mood despite the recent turmoil.”
ROMP also found Birmingham and Manchester had the lowest yields at 6.5 per cent. Most other regional cities reported prime yields of between 6.65 per cent and 6.75 per cent. Birmingham was one of four cities that experienced the smallest yield shift of 25 basis points.
Mr Swallow added: “The Birmingham market remains as yet relatively unfazed. Nonetheless, the continuing restrictions on finance and increasing lack of confidence mean the general investment market will fall further, however the impact on prime assets will be much less.” The divergence between investment and occupational sentiment continued during quarter three with a further outward shift in prime office yields.