BIRMINGHAM SPRING 2019 OUTLOOK However, the real game-changer for DRIVERS Birmingham is HS2. Phase 1 will connect London SUMMARY in 49 minutes (with phase 2 providing linkages BIRMINGHAM KEY ECONOMIC AND OF GROWTH northwards), and will shift perceptions of the BUSINESS STATISTICS city. With rising costs and heightened political • Birmingham has benefitted Birmingham has a population of just over 1.1 Source: Experian, ONS, Thinkbroadband, Land Registry uncertainty, it is possible that the scheme could *England million, and 2.9 million people live within the from a series of infrastructure be altered or the 2026 start date for phase 1 wider West Midlands County conurbation and public realm enhancements could be delayed. But a major change or BIRMINGHAM UK (which also comprises the Wolverhampton, in recent years, and HS2 will cancellation would be highly controversial, ECONOMIC GROWTH 2.8% pa 2.2% pa be a major catalyst for further Coventry, Dudley, Sandwell, Solihull and Walsall given the scale of investment to date. LAST 5 YEARS investment and development. local authority areas). This puts the wider The new terminus at Curzon Street will underpin The city’s profile will receive an Birmingham area on the same scale as Greater wider development and regeneration, and is at the OUTPUT PER HEAD £23.510 £26,600 additional boost from the 2022 Manchester’s 2.8 million people. centre of the Curzon Street Masterplan. Proposals include around 4.5 million sq ft of office space, over EMPLOYMENT GROWTH Commonwealth Games and its 1.8% pa 1.5% pa The city’s population is forecast to grow by 5.6% over a million sq ft of B2/B8 space, 4,000 residential LAST 5 YEARS status as a testbed for 5G mobile the next decade, as is the wider West Midlands County units, plus retail, hotel, leisure and other uses. technology. UNEMPLOYMENT RATE area (Experian). This is slightly ahead of the UK (5%) The long-term regeneration of the city centre 6.7% 4.2% • Office availability is now at its and well ahead of the West Midlands region (4.2%). is continuing and the Birmingham Development (ILO) lowest level in a decade, but this Birmingham’s employment is expected to grow by a Plan 2031 sets out the city’s strategy for similar 5.3%, again ahead of the UK (4.6%) and well the delivery of commercial and residential GCSE AND EQUIVALENT will change in 2019 with a wave AVERAGE ATTAINMENT 45.7 44.3* ahead of the West Midlands region (3.7%). development. This will support long-term growth of speculative development 8 SCORE Birmingham is at the centre of the West Midlands and extend the city’s core, building on the Big completing. We expect strong Combined Authority (WMCA). This has an elected City Plan, launched in 2010. Birmingham is already demand for this space and the BUSINESS BIRTHS Mayor, currently Andy Street, who is responsible for reaping the benefits, with Paradise Circus and prime city centre rent should PER 1,000 PEOPLE 5.9 5.7 delivering the West Midlands’ devolution programme, Arena Central delivering not only much-needed 2017 push upwards towards the and is key for driving local growth initiatives and grade A commercial space, but also major £35 psf mark. building on the opportunities offered by devolution. improvements to the public realm. ULTRAFAST BROADBAND Looking more widely, A number of other areas within the city COVERAGE • A raft of major regeneration Birmingham is a key part 89.3% 56.2% of the Midlands Engine, a collaboration of 77 local centre have further transformational potential. (OVER 100 MBPS) schemes are under way or in the % OF PREMISES authorities from across the West and East Midlands The 17-hectare Smithfield site is a significant pipeline to further improve and (plus a small number from surrounding regions). The regeneration scheme. Strategically situated extend the city core. These will AVERAGE HOUSE PRICE Midlands Engine focusses on improving transport adjacent to the Bullring and New Street station, £187,756 £230,630 (NOV 2018) provide new commercial space and skills, encouraging innovation, and promoting the and close to the Curzon Street area, it is set to cater for the city’s growing Midlands as a major driver of the UK economy. to include culture, retail, leisure, business and AVERAGE HOUSE employment base over the Birmingham has benefitted froma series of residential, as well as the relocated Bull Ring retail PRICE GROWTH 6.2% 2.8% medium term. infrastructure enhancements in recent years, including markets. The scheme has recently taken another (YEAR TO NOV 2018) the tram extension linking Snow Hill and New Street step forward with Lendlease announced • There is ongoing distribution stations, redevelopment of New Street station to as Birmingham City Council’s development demand from a variety of provide a greatly enhanced passenger experience, and partner, and could get under way in 2022. Other retailers and third party logistics the runway extension at Birmingham Airport. locations with further commercial development operators. However, there is a Birmingham will host the 2022 Commonwealth potential include the Snow Hill district and Figure 1 West Midlands County economic growth (GVA) severe lack of supply, limited Games, providing a major boost to the city’s Martineau Galleries. Source: Experian speculative activity, and few international profile. A significant investment has Major developments out of town also Growth, % pa available sites, putting upward been made in the Athlete’s Village at Perry Barr, on have the potential to add significantly to pressure on rental and land the former Birmingham City University site. After the Birmingham’s commercial and housing stock. 4.0 values. Games, the site is proposed to provide 1,400 homes, For example at Langley, to the north east of the catalyst for wider regeneration of the area. the city, an urban extension of 6,000 homes is 3.5 • Investor appetite for commercial The West Midlands be will a testbed for 5G (the next planned and the adjacent Peddimore could add 3.0 property remains healthy, with generation of mobile communications technology), with significantly to the logistics and manufacturing continued interest from overseas hubs in Birmingham, Coventry and Wolverhampton. stock (see the industrial market section). 2.5 buyers. A strong occupational Although there are still some uncertainties regarding Other locations could also see significant 2.0 story will underpin this over the the rollout, it should allow Birmingham to reap early commercial development, and the UK Central benefits from the new technology and additional sites coming year. Hub and HS2 interchange aims to maximise 1.5 will be required to deliver it. the potential of the new HS2 station at Solihull. The growing life sciences sector is increasingly A special-purpose vehicle has been established 1.0 important, boosted by Calthorpe Estate’s ongoing to deliver the project across five separate sites, 0.5 development at the Pebble Mill site, helping to which together could provide more than position it as one of the UK’s leading medical and life eight million sq ft of commercial space, 77,500 0 science locations. new jobs and 4,000 homes over the next 20 years. 2014 2015 2016 2017 2018 2019 2020 2021 2 carterjonas.co.uk 3 Birmingham has a diverse and growing Looking to the medium term, HS2, further Figure 2 Birmingham office take-up OFFICE employment base. In recent years, its city centre regeneration and the array Source: Birmingham Office Market Forum, Carter Jonas MARKET buoyant office market has seen a number of schemes in the pipeline will maintain of occupiers in the banking and finance momentum on the supply side, and Annual take-up, sq ft sector, such as HSBC and Deutsche population and employment growth will 1,600,000 continue to drive occupier demand. Bank, take large amounts of space, The out of town market is focussed benefitting from the city’s high quality 1,400,000 around Solihull, with its excellent motorway labour force and lower cost base connections and proximity to Birmingham 1,200,000 compared with London. Airport and Birmingham International railway 10-year average station. This includes the market’s two largest 1,000,000 City centre take-up totalled 754,000 sq ft in office parks at Birmingham Business Park and 2018, broadly in line with the 10-year average. This Blythe Valley Park. was considerably lower than the record-breaking 800,00 PRIME RENT Blythe Valley Business Park is considered £33.00 PSF one million sq ft let in 2017, a figure boosted by to be one of the premier out of town locations, 600,000 the Government Property Unit taking a pre-let of and is actively promoting more sustainable around 240,000 sq ft at Arena Central. transport links into the city centre, as well as 400,000 2018 TAKE-UP The 2018 total was achieved through a healthy new amenities, bars and cafes. This reflects the 1.2 MILLION volume of small to medium sized deals, with only wider trend of occupiers demanding access to SQ FT one letting in excess of 50,000 sq ft (Birmingham excellent public transport and facilities. Other 200,000 City University, who took 118,200 sq ft at Belmont smaller but important business parks are also Works, Eastside). Other notable transactions located in the area, including Birmingham 0 in 2018 included engineering consultancy WSP International Park, Trinity Park, Solihull 2011 SPECULATIVE 2009 2010 2012 2013 2014 2015 2016 2017 2018 SPACE UNDER taking 46,000 sq ft at the Mailbox and serviced Business Park and FORE Business Park. office provider BE Offices taking around Locations elsewhere around Birmingham Figure 3 Birmingham City Centre prime office rents CONSTRUCTION 40,000 sq ft at Somerset House.