An Investor’s Guide to A City Firmly on the Radar FAST FACTS: of Global Investors BIRMINGHAM

Strategically located in the very REGION: centre of , Birmingham West Midlands, England is one of the UK’s most important regional hubs. POPULATION: The home to the largest city economy outside 2.8 million (Birmingham of [3], Birmingham is established as a metropolitan district) [1] prosperous, high-growth investment city.

But it’s Birmingham’s future growth DISTANCE FROM LONDON: projections that make it such an exciting investment location for global investors. 128 miles (206 kilometres)

In the coming years, key infrastructure projects 1 hour 24 minutes direct-train such as High-Speed 2 (HS2) will accelerate the link, reducing to just 49 minutes growth of the city’s economy, population, and by 2029 with (HS2) – subsequently – its property market.

An established investment city, on the verge ECONOMIC OUTPUT: of new and prolonged period of growth. GBP 31.9 billion – the largest city economy in the UK outside The time to secure assets in Birmingham isnow . London [2]

It lies near the geographic centre of England, at the crossing points of the national railway and motorway systems.

Birmingham is the largest city of the West Midlands conurbation—one of England’s principal industrial and commercial areas—for which it acts as an administrative, recreational, and cultural centre. [4]

ENCYCLOPAEDIA BRITANNICA

Invest in UK Property: An Investor's Guide to BIRMINGHAM Invest in UK Property: An Investor's Guide to BIRMINGHAM

A Young, Rising Population

Birmingham is the second most populous city in the UK

Birmingham city centre has seen of Birmingham’s [14] a 163% increase in population population is under 25 (2002-2015), the second fastest > The youngest major city in rising in the UK [10]

10,000 people are added the population of Birmingham every year. That’s 200 people a week![11]

of ‘city core inhabitants’ Population growth is expected aged under 35-year-old [15] The University of Birmingham to be strong in Birmingham with > Affinity Living’s key target market an extra 50,000 people forecast to be living in the city by 2023 [12] Birmingham boasts world class universities and creative industries, we have a growing digital sector and an expertise in business, professional and financial Birmingham was the most services, and the city has a wealth of opportunities in the pipeline. popular city destination for those graduate The Birmingham city-region is currently experiencing the highest inward migrating from London in 2018, retention rate investment outside of London, and our visitor economy is going from strength followed by Manchester and to strength. We are turning heads, not just in the UK but around the world. [16] Leeds[13]. A significant number of these movers are young workers PAUL FAULKNER, CEO, GREATER BIRMINGHAM CHAMBERS OF COMMERCE and families.

Invest in UK Property: An Investors’ Guide to BIRMINGHAM Invest in UK Property: An Investors’ Guide to BIRMINGHAM A Diverse, International City

Birmingham’s Chinese Quarter; the city has one of the UK’s largest Chinese populations. Exterior and minaret at Birmingham Central Mosque, while an Emirates A380 aircraft takes off from on its daily flight to Dubai.

FAR EAST CONNECTIONS BIRMINGHAM & WEST MIDLANDS’ FOUR BIGGEST FOOTBALL CLUBS ALL HAVE ASIAN OR MENA OWNERS:

has been a partner city of Birmingham since 2006 [18]

ASTON VILLA WOLVERHAMPTON WEST BROMWICH BIRMINGHAM FOOTBALL CLUB WANDERERS FC ALBION FC CITY FC Premier League Premier League Premier League Championship (Tier 2)

Part-owned by Naseef Owned by Fosun Owned by Chinese Owned by Hong Kong Onsi Sawiris, Egyptian International, a billionaire businessman Paul has the 4th largest group of Chinese students across the UK [19] billionaire listed as the Chinese conglomerate businessman, Lai Suen Cho Hung and fourth richest African headquartered in Guochuan [22] his Trillion Trophy Asia by Forbes in 2019 [20] Shanghai. [21] company [23]

Invest in UK Property: An Investor's Guide to BIRMINGHAM Invest in UK Property: An Investor's Guide to BIRMINGHAM A City That Connects the UK & the World

EASY ACCESS TO BRITAIN’S AN INTEGRAL DIRECT ACCESS TO MAJOR MAIN MOTORWAYS RAIL HUB GLOBAL CITIES

M40 Birmingham New Street Birmingham International Airport London via Oxford One of the principal stations of the UK rail network. Birmingham International Airport is one of the busiest airports in the UK. Handling 12.5 million passengers each year, its top three routes are , Amsterdam and Dubai.[24] M6 LONDON - 1 hour 25 mins direct London (via the M1), Manchester, Liverpool and BRISTOL - 1 hour 25 mins direct the rest of North West England, and then beyond MANCHESTER - 1 hour 27 mins direct to Glasgow and Scotland LIVERPOOL - 1 hour 35 mins direct LEEDS - 1 hour 57 mins direct M5 CARDIFF - 2 hours direct A South West England, with cities including Bristol, GLASGOW - 4 hours direct D Bath and Exeter EDINBURGH - 4 hours direct E B

Birmingham Moor Street F The city’s second busiest station, and a major C G connection on rail lines across the Midlands.

London in 1 hour 45 mins direct. I Plus many major towns and cities throughout the Midlands region. A DUBLIN - 1 hour 10 mins. F ROME - 2 hours 40 mins J B PARIS - 1 hour 20 mins G ISTANBUL - 4 hours H Birmingham Snow Hill C MADRID - 2 hours 25 mins H DUBAI - 7 hours Major regional station. D AMSTERDAM - 1 hour 20 mins I ISLAMABAD - 7 hours 40 mins

Many major towns and cities throughout the E FRANKFURT - 1 hour 30 mins J DELHI - 9 hours 15 mins Midlands region.

COMING SOON: HS2 Station Birmingham Curzon Street, the city’s ‘HS2 station’, is expected to cut direct journey times between Birmingham and London to just 49 minutes from 2029.

‘Spaghetti Junction’ - iconic Birmingham landmark which underlines its extensive UK motorway connectivity.

Invest in UK Property: An Investor's Guide to BIRMINGHAM Invest in UK Property: An Investor's Guide to BIRMINGHAM Birmingham’s proposed Curzon Street HS2 station. Together with a wider GBP 900 million regeneration scheme of the surrounding area, it will lead to the creation of several new neighbourhoods, including 36,000 new jobs.

Birmingham: A City With an Exciting Future

High Speed 2 (HS2)

HS2 is the UK’s new GBP 106 billion, 345- mile high-speed railway network, connecting London to the Midlands and Northern England. Journey Times from Birmingham on HS2 The UK government estimates the new network will deliver benefits to the UK economy worth over GBP 103 billion [25]. LONDON 49 minutes And few other cities will benefit from HS2 (currently 1 hour 24 minutes) quite as much as Birmingham is forecast to. MANCHESTER Construction has started on Phase One, 41 minutes (currently 1 hour 25 minutes) which will link London and Birmingham by 2029. The first trains, operating out of LEEDS Birmingham’s new Curzon Street station, will 57 minutes see the fastest trains in Europe connecting (currently 1 hour 58 minutes) the city to London in just 49 minutes.

Invest in UK Property: An Investor's Guide to BIRMINGHAM Invest in UK Property: An Investor's Guide to BIRMINGHAM HS2’s Impact on Birmingham’s Growth Other Major Projects in the Pipeline

MIDLANDS GATEWAY TO THE WORLD PROJECT Masterplan to increase the capacity of Birmingham International Airport [34]

STRONGER ECONOMY 18 million passengers per annum An average GVA increase of GBP 680 per worker [26] Since HS2 was given the by 2033 targeted green light, demand for city centre living has far outpaced supply. The creation of 34,000 new jobs A GBP 4 billion increase in economic output per year Demand has largely been comprised of young professionals [33] The airport to increase the Rail travel between Birmingham and London is JLL Midlands economy by 42% predicted to more than double in 20 years [27]

BIG CITY PLAN A 20-year ‘city centre masterplan’ of regeneration works [35]

INCREASED JOBS UPLIFT IN PROPERTY PRICE GROWTH 50,000 additional jobs in the West Midlands (26,000 65,000 sq.m. of new and improved of which would be in Birmingham/Solihull) [28] The average property price public spaces in Birmingham has already increased by 8% since 2017 and 1.5 million sq.m. of new floorspace Employers to gain access to a larger pool of employees is set to rise further [30] for local businesses, improving productivity and 50,000 new jobs created reducing business costs [29] “Buyers are jumping at the chance to buy” in Birmingham

Access to a greater range of job opportunities in more locations for people living in these regeneration areas 2022 COMMONWEALTH GAMES As an example of the potential th th impact, Crossrail – London’s Birmingham will host the Games, 27 July – 7 August 2022 proposed new rail network – has already caused some property on Between 500,000 and 1 million [31] the route to “double in price” visitors are expected to visit the area during the Games [36] Birmingham residents whose property is handy for the new Curzon Street station or the new interchange The minimum benefit to the West station near the city’s airport should see prices go up once HS2 is fully up and running [32] Increased access to London Midlands of hosting the Games and other major cities will turn would be £1.5bn of legacy benefits [37] THE GUARDIAN Birmingham “into a commuter hotspot pretty much overnight”

Invest in UK Property: An Investor's Guide to BIRMINGHAM Invest in UK Property: An Investor's Guide to BIRMINGHAM A Property Market That Cannot Keep Pace With Demand Strong 5-Year Price Growth Forecasts for Birmingham & West Midlands Birmingham is among the UK’s most popular investment locations for global Of all the housing markets that JLL monitors, property buyers. Forecast average cumulative property Birmingham is forecast to price growth between 2021-2025[39] Like the very best markets, Birmingham’s property performance is underpinned by a significant see the strongest house price undersupply of real estate across all sectors in the city and wider region. In particular, Birmingham and rental value growth city centre is starved of quality purpose-built rental accommodation. over the next 5 years. The city is also seeing a growing With all forecasts predicting strong growth in the coming years, it’s a property market with all housing shortfall. [41] the essential qualities required for a successful long-term investment. JLL

5-year average property price growth in the West Midlands forecast at 21.7% to 2024 – Savills[40]. UK average during this period is forecast at 20.4% A History of Price Growth H1 2020 5 YEARS H2 2020 2021 2022 2023 2024 (ACTUAL) TO 2024* Property prices in have enjoyed consistent growth levels of LONDON 3.7% 1.5% 0% 1.0% 4.0% 2.0% 12.7% the last 10-15 years. SOUTH EAST 2.3% 3.5% 0% 2.5% 5.0% 3.0% 17.3% The price of an average two-bedroom EAST OF ENGLAND 2.3% 3.5% 0% 2.5% 5.0% 3.0% 17.3% apartment increased by 5.2% during 2018. SOUTH WEST 1.3% 3.0% 0% 3.0% 5.5% 3.5% 17.3% There was also a 2.9% annual percentage EAST MIDLANDS 1.5% 1.5% 0% 5.0% 7.5% 5.5% 22.6% change in house prices in August 2020; UK WEST MIDLANDS 0.7% 1.5% 0% 5.0% 7.5% 5.5% 21.7% average 2.6%[38]. NORTH EAST 0.3% 0.5% 0% 5.5% 8.0% 6.0% 21.7%

BIRMINGHAM AVERAGE HOUSE PRICE PERFORMANCE NORTH WEST 3.9% 0.5% 0% 6.0% 8.0% 6.5% 27.3%

135 YORKSHIRE 1.8% 1.0% 0% 5.5% 8.0% 6.0% 24.1% 130 WALES 1.7% 1.0% 0% 5.0% 7.5% 5.5% 22.3% 125

120 SCOTLAND 1.8% 2.0% 0% 5.5% 8.0% 6.0% 25.4% 115 UK 4.0% 0% 4.0% 6.5% 4.5% 20.4% 110

105

100 HOUSE PRICE GROWTH (PA) 2020 2021 2022 2023 2024 2025 2021-2025* 95

90 2004 2008 2006 2009 2007 2005 2014 2010 2016 2017 2015 2013 2012 2011 BIRMINGHAM 4.5% 0% 4.0% 5.5% 5.0% 5.0% 19.5%

UK 3.5% -1.5% 2.5% 4.0% 5.0% 4.5% 14.5%

* Cumulative Growth 5% HIGHER THAN THE UK AVERAGE

Invest in UK Property: An Investor's Guide to BIRMINGHAM Invest in UK Property: An Investor's Guide to BIRMINGHAM A Thriving Rental Sector AVERAGE WEEKLY ASKING RENTS IN BIRMINGHAM Rental price growth rates in Birmingham £80 £90 £100 £110 £120 £130 consistently outpace those in the wider West Midlands area 2019

Average asking rents across the city have 2018 [42] risen by 28% since the end of 2009 2017

City centre rents have risen due to a lack 2016

of available stock, with two-bedroom flats 2015 increasing by 2.7% in 2018 [43] 2014

The prime rental market is even more 2013 unsupplied of available stock, and rental values for two-bedroom flats have 2012 increased by 7.1% as a result 2011

2010 cumulative average rent 12% 2009 growth forecast 2021-2025 - JLL[44]

The Undersupply Driving Growth for Investors

Birmingham needs 89,000 new homes between 2011 and 2031 The majority of households living in the city centre are in the private That’s the equivalent of 4,450 new homes rented sector, according to Knight per a year [46 Frank analysis. Estimates suggest that a further 2,500 homes Around 60% of those living there a year are still needed in Birmingham to are under the age of 35, reflecting help meet demand and clear the backlog [47] the growth in a young, professional population attracted by the Available land in Birmingham is scarce improving jobs market and career and costly, with average development opportunities within the city [45] land prices having increased from GBP 12,000-GBP 16,000 per unit in 2013 to GBP KNIGHT FRANK 35,000 in 2018 [48]

Subdued development activity in recent years has “only exacerbated the demand for rental accommodation in the city centre” [49]

Invest in UK Property: An Investor's Guide to BIRMINGHAM Invest in UK Property: An Investor's Guide to BIRMINGHAM Sources [30] HS2 Route UK Cities Development - Read More [31] House Prices Crossrail Map - Read More

[1] World Atlas: Largest Cities in England - Read More [32] The Guardian: HS2 Property Prices Midlands -Read More

[2] Birmingham Q4 2019 Update - Read More [33] JIL: West Midlands Residential Forecasts - Read More

[3] Birmingham Government Update Q4 2019 - Read More [34] Birmingham Airport Unveils Master Plan - Read More

[4] Britannica on Birmingham - Read More [35] Birmingham Gov: Big City Plan - Read More

[5] Birmingham Government Update Q4 2019 - Read More [36] Greater Birmingham Chambers: Commonwealth Games 2022 - Read More

[6] Business Live: West Midlands Sees Bumper Crop - Read More [37] Mace Group: Commonwealth Games 2022 - Read More

[7] Knight Frank: The Birmingham Report 2018 -Read More [38] Zoopla UK House Price Index September 2020 - Read More

[8] Silicon Canal - Read More [39] JIL: West Midlands Residential Forecasts - Read More

[9] Greater Birmingham Chambers 2018 - Read More [40] Savills: Our Mainstream Residential Market Forecasts - Read More

[10] BBC: The UK’s rapid return to city centre living -Read More [41] JIL: West Midlands Residential Forecast - Read More

[11] Birmingham 2020 - Read More [42] Knight Frank: Birmingham Market Update 2020 - Read More

[12] International Residential: West Midlands Residential Forecasts - Read More [43] JIL: West Midlands Residential Forecast - Read More

[13] Knight Frank: Birmingham Market Update 2020 - Read More [44] JIL: West Midlands Residential Forecast - Read More

[14] The Birmingham Economic Review 2018 -Read More [45] Knight Frank: Birmingham Market Update 2020 - Read More

[15] JIL: West Midlands Residential Forecasts - Read More [46] Savills: The Impact of HS2 on Development - Read More

[16] Greater Birmingham Chambers 2018 - Read More [47] Propety Investor Today: Boom for Birmingham - Read More

[17] Nomisweb: Census 2011 - Read More [48] Knight Frank: The Birmingham Report 2018 -Read More

[18] Distinctly Birmingham: Guangzhou - Read More [49] JIL: West Midlands Residential Forecast - Read More

[19] The Times: University of Birmingham Opens Door to More Chinese Students - Read More

[20] Forbes: African Billionaire Fortunes - Read More

[21] Wolves Club Ownership - Read More

[22] Lai Guochuan - Read More

[23] SCMP: Hong Kong Takes Over Birmingham City - Read More

[24] Birmingham Airport Experiences Another Strong Year - Read More

[25] Greater Birmingham Chambers 2018 - Read More

[26] Birmingham Transport HS2 - Read More

[27] Birmingham Transport HS2 - Read More

[28] Birmingham Transport HS2 - Read More

[29] How HS2 Will Transform the West Midlands - Read More

Invest in UK Property: An Investors’ Guide to BIRMINGHAM Invest in UK Property: An Investors’ Guide to BIRMINGHAM Please note that this article is being sent to you for discussion purposes and contains a number of reasonably held opinions about very general investment themes. No reliance may be placed on the information set out in this article and no liability is assumed by Select Property Group Limited (including and any parent companies or subsidiaries, staff or representatives) in connection with any of the contents of this publication.

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