HS2 to boost office market in Birmingham
The arrival of HS2’s headquarters in Birmingham is set to spark office development in the city.
Experts are predicting that HS2 will initially cause a shortage of top grade office space, followed by a host new developments geared at meeting the demands of business interest in the city.
Andrew Berry of DTZ Birmingham said: “At current Grade A take-up levels there is just 18 months of Grade A accommodation remaining, with approximately half of this located in Colmore Plaza.”
However, this shortage is not expected to last, with the long term benefits far outweighing the negatives, as more businesses move to the area due to HS2, as explained by JLL chairman Jan Thompson.
“In the short-term, the removal of 100,000 sq ft of space will eat up available stock, which will then kick-start a new wave of office developments, some on a speculative basis, which is certainly much needed.”
During our focus on the South East last month, we discovered that commercial agents are increasingly seeing a shortage in the top grade of office space, with investors and occupiers looking at refurbishing Grade B units as an alternative.
Birmingham has been without major office development during the recession, but looks set to ride a wave of new projects going forward. The Arena Central development is one of these projects, which will initially provide 135,000 sq ft of Grade A office space, a number which could potentially rise to 860,000 sq ft in the future.
Jonathan Wallis from Arena Central Developments said: “In Arena Central we are looking to provide a high quality location that will continue to build on Birmingham’s burgeoning reputation as an attractive destination blue chip occupiers.”
More projects like Arena Central are going to be needed in the future if Birmingham’s office market is to keep up with the expected demand, but it seems that HS2’s arrival in the city will be the catalyst for some much needed development.
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