Office rents at pre-recession levels
OFFICE take-up in Birmingham city centre is on track to reach 800,000 sq ft by the end of 2016, according to Savills.
The estate agent also says top Grade A office rents are back up to pre-recession levels at £32.50 per sq ft compared to £30 per sq ft in 2015.
Full year take-up is set to be well ahead of the five-year average of 699,000 sq ft, although lower than the 996,000 sq ft total of 2015.
Savills says the largest central business district deals of 2016 by size were all linked to the consolidation and relocation of existing occu- piers within new entrants.
The firm predicts that in 2017 the M42 corridor could follow the pattern seen in the city centre, with rental growth potentially followed by the first speculative office development out of town for a decade, due to increased demand.
Headline rents in the M42 market are now £22 per sq ft to £23 per sq ft compared to £19.50 per sq ft in 2015, and likely to continue on an upwards trajectory.
Nick Williams, office agency director at Savills, said: “After anoth- the city, rather than er strong year for Birmingham’s office market, we expect supply constraints to intensify both in and out of town in 2017.
“A number of central government requirements currently in the market will crystallise and erode city centre stock further.
“In the M42 Corridor, we could well see the first speculative development out of town for more than 10 years, as the positive effects of HS2-linked relocations and ‘northshoring’ firms seeking cost efficiencies outside of London are felt in the city centre and beyond.”