Tightening Birmingham Rents Hint At Tall Future

Tightening Birmingham Rents Hint At Tall Future

Published on 01-11-2010 by Skyscrapernews.com
Another indication that perhaps the British property market is starting to come out of recession is the improvement of grade A office rents outside London, with CB Richard Ellis showing that prices have stopped falling in Birmingham.

Since 2008 the rents have slid from £33 per square foot to £27.50 per square foot whilst take up has fallen from 959,317 square feet in 2008 to 657,280 square feet in 2009. So far in 2010 it has run at 546,000 square feet for the first ten months of the year, which if annualised is a slight decrease on 2009.

Despite this, what's driving rental levels to harden is that very little grade A space is being built in Birmingham now, a pattern repeated all over the country.

In London this has already translated into a shortage of suitable new buildings coming on to the market, and thus a competition between developers to build approved skyscrapers - a relatively easy way possible to provide a large amount of prestigious square feet in a central location if you already have planning permission.

Birmingham, like London, also sees some major rental deals in excess of 100,000 square feet, but is running out of constructed buildings that can accommodate them although there are schemes like Kenmore's 1 Snow Hill Plaza and British Land's 103 Colmore Row waiting in the wings.

Whether this translates into a slew of new commercial property construction in Birmingham remains to be seen, but if the London experience is anything to go by, it's not something to be ruled out.

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