Birmingham: Steady As She Goes
A slight sense of anti-climax pervades the Birmingham market, which saw take-up surge up to an unusually high 1 million sq ft in 2017, a number not seen before nor, sadly, since. In 2019, take-up in the city centre totalled 780,000 sq ft, rather below the five-year average. Like Edinburgh, Birmingham is exposed to financial sector Brexit anxieties, and it is also possible that the relative lack of new Grade A floorspace inhibited the total. These thoughts bring comfort to the developers of the next generation of new build schemes at Three Snowhill, 2 Chamberlain Square, Paradise and 103 Colmore Row. Professional and financial services occupiers continue to dominate, which means Birmingham does well when the economy goes up, but is vulnerable when it goes down.
Manchester: Tech Newcomers
Still the big-boy of the UK regional markets, and still performing well. The days when 1 million sq ft of city centre take-up was a novelty are now long gone: the city centre scored 1.45 million sq ft in 2019, a shade down on 1.75 million sq ft in 2018 but still above the five-year average of 1.35m sq ft according to figures from the Manchester Office Agents Forum. The entire Manchester market (including the Quays, Old Trafford and the southern airport-proximate business parks) totals 2.34 million sq ft, the equivalent of Birmingham, Leeds and Bristol combined.
The growth of tech and coworking/serviced occupiers, often catering to the tech sector, set the pace in Manchester in 2019 and will again in 2020. Tech’s unstoppable rise was symbolised by the government’s secret eavesdropping organisation, GCHQ, who signed up for 60,000 sq ft. Coworking and serviced deals included Spaces acquisition of the 121,000 sq ft 125 Deansgate – the largest deal concluded in the city centre last year. Other operators to commit to workspace in the city include WeWork at Hyphen (51,000 sq ft), Huckletree (25,800 sq ft) at the Express Building in Ancoats and Regus (26,350 sq ft) at St James’s Tower.
Rents continue to rise, with a new a record of £36.50 per sq ft set during 2019. Agent speculation says it will be 18 months or less before it reaches £40 a sq ft, still only a third of London West End top prices and looking like very good value to relocators.