We are well used to the much documented shortage of investment opportunities in Birmingham city centre and the region.
Simon Quantrill of Knight Frank Birmingham, explains why and how a new trend of investors has emerged and how this is boosting activity in the commercial property market.
Low interest rates and the pressing need to safeguard future pension portfolios plus a semi guarantee of healthy capital growth to sustain future expansion has led to demand from a new quarter.
Private investors and small to medium-sized companies have now joined the chorus of those looking to acquire property as part of their investment portfolio.
Whereas residential has been consistently active, investors are also now turning their attention to commercial properties which tend to be more secure with tenants prepared to take longer leases.
This is very much a different market to those sought by the Funds - the traditional investors.
Lot sizes of up to #1 million are the most popular for this new breed of investors.
n addition, they are increasingly happy to purchase properties that are currently vacant with a view to finding a tenant and creating their own investment.
Knight Frank Birmingham receives an ever-increasing number of daily calls and enquiries from investors and, to a lesser extent, owneroccupiers searching to buy property.
The traditional office core of Birmingham city centre tends to be relatively expensive for such purchasers and therefore the search widens.
Areas such as the Jewellery Quarter and western fringes of the Hagley Road are popular, although most locations around Birmingham are considered prime targets.
They are also prepared to look further afield to such locations as Redditch and Bromsgrove to Tamworth along the M42.
Anything that comes to the market for sale, either on a freehold or long leasehold basis, sells well. This includes new/second hand modern office buildings as well as refurbishment or redevelopment opportunities with a number of potential users.
This has been illustrated by developments such as St Modwen's The Oaks development in Redditch where buildings have been offered for sale by Knight Frank when leases came due for renewal. The buildings sold quickly.
Similarly, Chase Commercial's Pinewood Court, at Marston Green, has been successful with over half of the units already sold. Chase Commercial is now on site with a similar scheme Bromsgrove and has plans for another scheme at Stratford.
Further examples closer to Birmingham city centre include 93-95 Hagley Road which has just been sold by Knight Frank to Cuthberts International for #650,000.
The rare appearance of a "for sale" board on one of the main routes in and out of the city centre generated a high level of enquiries and healthy evidence as to the amount of cash rich purchasers in the market place at levels between #500,000 to #1 million.
Castle Bromwich Hall, a Grade A Jacobean Hall with 13,000 sq ft of office accommodation, was also sold within three weeks of goingon the market.
In a further step forward, many owner-occupiers are also looking beyond their own requirements and seek to acquire slightly larger space than initially required to ultimately sublet to generate income.
These smaller sale opportunities, across the whole of the UK not just the Midlands, are keeping the market active during a slower period in the market generally.