Thanks to the upcoming HS2 project, combined with an increasingly buoyant local economy, commercial property in the West Midlands is enjoying one of its strongest revivals to date. Along with industrial units, this has seen the office market enjoy a period of strong prosperity, with the Solihull office market set to benefit from its most active year in a decade.
According to research by property consultancy KWB, Solihull and the M42 corridor’s out of town office market reached almost 150 per cent of its annual long term average by the end of the third quarter. In the 2014 financial year so far, almost 320,000 square feet of office space has been let or sold, meaning that if momentum continues to build as the year draws to a close the area could almost double its 220,000 square foot long term average.
During the third quarter, 22 transactions involving 124,500 square feet of space took place in the Solihull and M42 corridor office market. The largest letting during the period took place at Birmingham Business Park, where IMI increased its space to 36,000 square feet at 4060 Lakeside – an increase of 8,500 square feet from its previous location in an adjacent office building.
Although much of the buzz in the West Midlands is centred around Birmingham it seems that Solihull and the M42 corridor are becoming increasingly attractive for firms seeking large office spaces for relatively low rental costs. As a result, the average letting size in the area amounted to 5,659 square feet: 2,100 square feet higher than the average for Birmingham city centre and an indicator that the office market in the area will remain buoyant in the long term.
KWB’s report backs up this assertion, and goes on to state that large leases will continue to prove popular in the coming year.
It says; “We anticipate these notable transactions to come to fruition in early 2015, given the timeframe inherent for completion on larger leases.
“This also means that the impressive statistics for 2014 are not a blip, with good figures continuing well into the New Year and beyond.”
The West Midlands is becoming an increasingly attractive business destination for firms in all areas of industry, with manufacturers and logistics firms particularly prominent in recent lease agreements. Although activity amongst vehicle manufacturers such as Jaguar Land Rover and Bentley have cooled somewhat since the initial boom period of the recovery earlier in the year, firms such as Mitsubishi and Daikin have chosen to increase their space in the region during the last quarter, cementing the West Midlands’ position as a prime area of manufacturing industry growth within both the UK and the Eurozone as a whole.
The performance of Solihull and the M42 corridor’s office market has proven particularly profitable for KWB, as it secured 72 per cent of the office space transactions during the past quarter. Should its predictions turn out to be true, the property firm will surely profit even more in the coming 12 months.
Do you think HS2 is responsible for the interest in Solihull’s office market?
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