Work has started on the second building to be developed at the Arena Central project in Birmingham city centre.

3 Arena Central will be home to staff from HM Revenue & Customs and the Department for Work and Pensions after a 25-year lease deal was struck last year for the entire 14-storey building.

There will be more than 3,600 civil servants based there by 2020 where they will join the new head office of HSBC UK on the development.

The move is part of the Government's plan to reduce its portfolio of buildings across the country, with many HMRC offices being consolidated into 13 regional hubs.

Arena Central is being delivered by ACDL, a joint venture led by Miller Developments, whose managing director Andrew Sutherland said: "Marking the start of construction on a building is always an exciting time and we are exceedingly pleased to be joined by our colleagues from the Government to mark this momentous occasion.

CGI of HMRC's new home 3 Arena Central
CGI of HMRC's new home 3 Arena Central

"From a development perspective, the start on site of 3 Arena Central is a big step as it enables us to maintain momentum on the site as we near the final stages of delivery of the new HSBC UK HQ."

Steven Boyd, estates director for HMRC, added: "This is an important milestone in the delivery of the Government Hub in Birmingham, which will be the new home for HMRC in the West Midlands.

"When it is built, the new building will mean our staff can work in a modern and bright environment, while working collaboratively with other teams, to increase our effectiveness in collecting taxes."

3 Arena Central is 240,000 sq ft and has been designed by architecture practice Make, the firm behind Birmingham landmark The Cube.

It is being funded by L&G with CBRE and GVA as joint letting and investment agencies.

The overall Arena Central project will have three new offices buildings and two residential blocks while a new Holiday Inn Express hotel opened last year.