Keeping Birmingham green

Birmingham City Council wants Birmingham to be “a city that takes a leading role in tackling climate change”, committing to becoming a net zero city by 2030. Road transport currently accounts for a third of CO2 emissions in Birmingham. Investing in the city’s public transport infrastructure won’t just cut CO2 emissions, it will improve Birmingham workers’ productivity and make the city and its suburbs more attractive places to live.

The experience of Covid-19 has made us all far more aware of the cleanliness of our environment and the quality of air we breathe. Indoor air quality is a key feature of certified green buildings, whose air systems can effectively filter out most virus-sized particles, according to MSCI. Birmingham’s office workers rate air quality as an important factor in creating the ideal office. But they’re less satisfied than average with the quality of air in their workplace. Investing in green buildings with great air quality will be an important step in recovering occupancy and bringing vibrancy back to the city centre.

Mass transit and residential values

People are willing to pay more for properties with great connectivity. Our research shows that residential values increase around new transport infrastructure in Birmingham, as well as in Manchester and London.

Following the Metro’s extension from St Chads to Grand Central in 2016, house prices within 500m of Metro stations grew 5% faster than values between 1km and 2km away. Overall, we estimate new Metro and rail stations in Birmingham could trigger a house price uplift of 0.7% per year. We have observed similar effects in London around the Jubilee Line extension (2.5% uplift per year) and around Manchester Metro stations (1.5% uplift per year).

That value uplift partly reflects areas becoming more desirable because they’re better connected. But it also reflects other improvements triggered by the infrastructure improvements. Often, opening new transport links will attract new businesses to an area such as shops, cafes, and restaurants, which make the local area more appealing. By reducing reliance on cars, these areas become less congested. Our London analysis showed the greatest uplift in values around those stations that had the most new development activity around them, even accounting for new build premium.

We expect to see this play out shortly along the Eastside extension to the Midland Metro. On completion, 1.7km of track will connect new stations at High Street Deritend, Meriden Street, New Canal Street and Albert Street to the wider Metro network and the planned HS2 terminus at Curzon Street (see map). Those new stations could unlock development in areas that weren’t previously viable. We need to encourage joined up, mixed-use development to maximise these improvements’ positive impact

A road map to less road traffic

It’s not enough to simply ban petrol-guzzling cars from the road. Electric vehicles still generate particulate pollution when they brake. And people still need to get around the city one way or another. Reducing carbon emissions and congestion from road traffic requires investment in alternative modes of transport.

Three quarters of workers in the West Midlands met county commute to work by car, according to Department for Transport figures. That proportion has remained broadly unchanged for over a decade. Little wonder, then, that transport researchers INRIX ranked Birmingham the 7th most congested city in the UK in 2019.

The number of people commuting to Birmingham by train and Metro rose 6.9% per year between 2014 and 2018. As the existing network nears capacity, the city will need additional investment to increase rail’s share and shift road traffic from cars to buses and bicycles. Fortunately, some of this investment is already underway. In September 2020, Transport for West Midlands announced a trial programme offering up to 10,000 e-scooters. Operated by Swedish company Voi, these e-scooters will be available first in Birmingham and Coventry city centres. They will then roll out to Sandwell, Solihull, Walsall, Wolverhampton and Warwickshire. Available for a £1 unlock fee then 20p per minute, this programme creates an environmentally sustainable alternative to cars for travelling short distances.

Energy efficiency’s impact on residential and commercial values

Buildings also contribute a significant proportion of the UK’s carbon emissions. Operating and heating buildings accounted for 17% of the UK’s carbon footprint in 2014. Improving buildings’ energy efficiency isn’t just good for the planet, however. It’s also good for values.

Our analysis of energy performance certificates shows that new homes are substantially more energy efficient than existing stock. New homes built in Birmingham since 2017 average an EPC score of 80, compared to 60 for existing homes. The average new build home generates 3.2 less tonnes of CO2 per year compared to older homes. It costs £611 less per year to heat and light.

The annual cost savings for energy-efficient homes are reflected in higher values, even when accounting for new build premium. A Birmingham home with an EPC of B is worth 34% more per square foot than a home rated D, based on our analysis of sales in the year to March 2020.

There are similar energy cost savings to be made in office buildings. 103 Colmore Row will be the first building in Birmingham’s central business district to connect to the city’s fourth district energy system. The new system means there is no need for fossil-fuelled boilers or heating in the building, lowering energy costs, reducing emissions, and improving local air quality, which is reflected in the building’s service charge being 12% lower than average. Once built, service charges are forecast to be £5.70 per sq ft (annually indexed) compared to £6.50 per sq ft on traditional buildings. Occupiers will also save money on repairs in the long run, as the district energy system means there no need to maintain plant and machinery within the building.

Lower service charges aren’t the only way sustainable buildings can help keep costs down. Making buildings healthier and more attractive places to work will support employee retention. Millennials are 81% less likely to move jobs in the next year if their employer focuses on employee wellbeing, according to a recent Gallup-Healthways poll. By designing their offices to promote wellness, businesses can reduce staff turnover.

Both the refurbishment of the Oozells Building and the ongoing redevelopment of 10 Brindleyplace offer a number of roof terraces and an abundance of biophilic design, which provide employees space to take breaks outdoors. And by incorporating plentiful bike racks and shower facilities, employees can commute to work sustainably. Biophilic office design and outdoor amenity space are proven to boost productivity and mental wellbeing as well as helping to attract and retain talent.

Along with achieving an excellent BREEAM rating, 10 Brindleyplace will be the first building in Birmingham to receive Fitwel accreditation. While BREEAM focuses mainly on building infrastructure, Fitwel focuses on the user experience and facilities offered. As employers look for ways to attract workers back to the city centre, building offices that offer a better user experience than working from home will become critically important.

For more information, please contact Savills Birmingham or arrange a market appraisal with one of our local experts.

View all of our latest Birmingham Cross Sector research here.