Over the last few years serviced offices have established themselves as the ‘golden sector’ and, with Birmingham's stand out start-up scene, it’s no surprise that flexible space has become a firm concept within the city. 

We’ve seen a rise in fast growing tech start-ups in Birmingham as well as an expansion in the creative industries, which has boosted the serviced office market and provided a strong need to nurture this growing trend. 

At the beginning of 2017 flexible workspace providers accounted for 21 per cent of total take-up (207,800 sq ft) – a huge difference from 2016, which saw no take up by this sector. This trend continued into 2018 with serviced offices and flexible workspace contributing 24 per cent of take-up. The demand has mainly been from established names including ihub, BE Offices, IWG and Orega. But can it continue?

A number of major brand serviced office providers don't yet have a presence in Birmingham, particularly those providing co-working environments which have active requirements for debut operations. We therefore expect further take up by serviced providers over the next 18 as these requirements progress. Their arrival could foreseeably raise the profile of the sector further and generate more demand from end users. 

There’s understandably speculation from some that the sector could get oversupplied in the short term but as long as new entrants can differentiate their product and ensure they deliver in line with the evolution in occupier demand then there’s little to suggest Birmingham won’t follow the pattern seen in London and other key regional cities.

As the battle to attract and retain talent hots up, we believe serviced and co-working offices will remain a fundamental part of the workplace offer. This, however, means traditional landlords will need to adapt their offer in order to remain relevant and competitive, particularly those offering space in the sub-5,000 sq ft bracket.

Buildings now have to cater for different styles of working, including both formal and informal areas along with the ever growing need for amenity and occupier experience. Increasingly, traditional landlords are also looking at creative leasing solutions to capture this rising demand for more space that can grow and flex with an occupier’s changing requirements. 

A great example of this in Birmingham is CEG’s Alpha Works (pictured above). In the upper floors of Alpha Tower, Alpha Works, launched in April 2017, is a landlord created and operated facility providing flexible workspaces for businesses looking to collaborate, create and grow. 

However, what really stands out is the latest offering of managed space within the building – Alpha Studios – which means the building caters for everything from co-working desks and traditional serviced offices to fully fitted solutions or a traditional lease. Collectively this provides a series of stepping stones for occupiers to grow and flex within the building as their requirements change. 

We firmly see this trend set to continue with institutional landlords also looking to innovate their approach to office leasing with a prime example being Legal & General’s Capsule brand, which offers a flexible managed solution platform with fitted, flexible space. 

We anticipate more landlords will follow suit as the blurring of occupier demand between traditional and flexible space continues to increase. 

Further information

Contact Savills Office & Business Space