Amy Haywood, associate director within the office agency department of Lambert Smith Hampton’s (LSH’s) Birmingham branch, looks at how social and demographic changes are having an impact on office demand in the city centre
Over the last decade we have seen more women graduating, enjoying a career and the independence that brings, and marrying and having children at a later age.
The number of women having children in their 30s and 40s has increased sharply over the last 20 years and in 2004 HBOS claimed that the ‘Bridget Jones effect’ had taken hold of Britain.
At the same time, the proportion of single women taking out mortgages had more than doubled, from 9.8 per cent in 1983 to 23.1 per cent in 2003.
This ‘Bridget Jones effect’ is compounded by a ‘Friends effect’, whereby young, single people choose to cohabit because of difficulty in getting on the property ladder alone.
These first-time buyers are gravitating towards urban apartments or small two-bed homes, which are readily available due to the renaissance of town centres.
These social and demographic trends are also fuelled by company car taxation. In the 1990s when this tax wasn’t an issue, the company car was a widespread perk and businesses wanted out-of-town business parks to allow staff to park at the office.
However, in the three years that followed the introduction of company car tax, HM Revenue & Customs highlighted a reduction in company car ownership from 1.6 million (2001) to 1.2 million (2005), a figure that has since dropped further.
With employees shunning the company car in favour of a cash allowance, there is inevitably a shift towards living and working near to transport hubs.These hubs are naturally found in city centres and Birmingham is no exception.
These changes in social behaviour have transformed the residential market and they are now taking hold of commercial property too, something that the sector’s landlords across the country will be acknowledging.
In response to these work-life preferences, our town and city centres are undergoing a renaissance, with high-quality residential developments now commonplace, especially around waterways, rivers and docks.
Examples of this trend in practice are King Edwards Wharf and Symphony Court, located around Brindleyplace in the city centre.
This upsurge in urban living has left an increased labour pool of prime young professionals in town and city centres. In a competitive labour market most employers will be seeking best advantage by basing their business in locations that are most attractive to this labour force, namely the same town and city centres.
While out-of-town business parks were the occupiers’ location of choice in the 1990s, today there are signs of a preference towards town and city centres. Business parks looking to remain attractive to young professionals and, consequently, office occupiers, must deliver added value in the form of increased residential and mixed-use space, or general amenities such as cafés, bars and supermarkets.
However, in a marketplace where development cash is harder than ever to come by, the existing amenities and transport links on offer in town and city centres make for a more attractive business base.