With HS2 now going full steam ahead after the bill received Royal Assent it could represent a new era for Birmingham – but the issue of industrial land supply is one concern that needs to be urgently addressed, according to a property expert.
Mike Price, partner at chartered surveyors Johnson Fellows, says that construction of the high-speed train’s railway will force many businesses to relocate from their existing premises along the route.
But the big question yet to be answered is: where do they relocate to? Mike expects to see a number of businesses forced to look outside the Birmingham area and further afield into the West Midlands, such is the lack of industrial space available in the city.
The most affected areas will be Castle Bromwich, Saltley and Washwood Heath, where the route passes through established industrial estates.
After three years of Parliamentary scrutiny, HS2’s construction is now inevitable. And with construction on the London to Birmingham route getting underway in spring, the lack of industrial land supply is a topic that needs to be brought to light, says Mike.
“A lot of current occupiers haven’t yet moved from their existing locations, simply because they haven’t been forced to. There were obstacles for the HS2 bill to overcome, so they could await the outcome, but now the last of them has been cleared the reality of having to relocate will hit home for many businesses,” he explained.
The partner in industrial and logistics at the Birmingham-based surveyors added: “While HS2 is a natural progression for a new dawn of transport, the reality for some businesses is that they will have to move and this could have a negative ripple effect on the city of Birmingham.
“Because of the lack of industrial land supply in the city and surrounding areas, the options for new developments are very limited. So the huge question that remains for those finding themselves in this position is: where do they go next?”
He forecasts that this could lead to a number relocating to other areas.
“This lack of space may mean businesses have to leave the Birmingham area. With the lack of space comes an inevitable rise in rents in the areas that are available. We are seeing rents pushing £7 per sq ft for new accommodation, and this may price out firms.
“The lack of land supply has seen operators sitting on their hands. Without the land supply we have not seen companies relocate into new facilities. This has had a knock-on effect of not releasing second-hand accommodation to the market.
“As such, opportunities are not only limited in terms of new build sites but also vacant existing accommodation. This will lead directly to those in this situation looking to relocate to other areas in the Black Country, and further into the West Midlands region, such as Redditch. This would be quite a blow for Birmingham.
“However, all is not lost and there is still time to address this issue but it needs to be discussed right now, and not cast in to the shadows,” said Mike. “The West Midlands Combined Authority has a huge investment package pledged over the next 20 years as part of the devolution deal with Central Government. This funding should be utilised for site assembly, remediation and infrastructure projects to release under-utilised land assets and focused on employment land opportunities.”