2013 set to record highest office take-up in five years, says GVA

Office take-up in Birmingham city centre was the second highest in the country during the third quarter of 2013, with 174,000 sq ft of deals transacted, according to the latest market analysis from GVA, the UK’s largest independent commercial property advisor.

The figures form part of the latest edition of GVA’s Big Nine report, which revealed that city centre and out of town deals in the nine regional office centres recorded take-up of 1,737,000 sq ft in Q3, 7% above the five-year quarterly average.

The city centre market made up 65% of this total (1,126,000 sq ft), demonstrating a 10% rise on the five-year quarterly average, while the out of town market recorded take-up of 611,000 sq ft, a lift of 2%.

With a healthy level of deals in the pipeline, 2013 is looking to set the record of the highest take-up across the regional markets in five years and for Birmingham take up again this year will likely be comfortably above the 5 year average.

Carl Potter, Director at GVA, said: “Occupier confidence has made a welcome return to a number of the regional city centres in Q3 paving the way for the highest take-up in five years. This is despite an ever decreasing lack of Grade A availability.

“To date, 2013 has been a positive year for Birmingham with 527,000 sq ft of space transacted, placing the city 10.5 per cent above the average. Deals such as Deutsche Bank taking occupancy of the 134,000 sq ft refurbished Five Brindleyplace have provided a boost to this year’s figures and a significant benefit to the city by helping to reverse the negative sentiment against the regional offices that we have seen in recent years.

“There are now a number of funds dedicated specifically to the regional office markets that have been established to take advantage of the growth in value that we will see over the next few years, driven predominantly by a lack of supply within the market of top quality accommodation – which in the current climate is unlikely to be replenished in the short to medium term.

“The next phases of development in most of the UK’s major cities are now positioned and ready but the mix of risk, viability and funding issues remain. For a healthy level of new supply there will have to be a change in appetite but with many newer schemes emphasising phased development there is bound to be a lag in implementation.

“As predicted for some time, this leaves the ingredients for high quality refurbishments as being the most likely stop gap solution.”

You can download the full report here: Big Nine – October 2013