There’s no question that 2020 has been a tough year for cities. For more than half the year Birmingham has faced some form of lockdown, restricting our access to the city’s offices, shops, bars, and restaurants.

As those restrictions begin to ease and with a Covid-19 vaccine rolling out, occupiers are returning to the city with fresh eyes. Our relationship with our offices and homes has changed. The types of features, fit-out, and amenities that occupiers want from those buildings have changed too.

The Midlands Engine’s Engine

City centres have been the engine of the UK’s economy for decades. Businesses have shown they’re willing to pay a premium to facilitate face-to-face interaction, even as city centre rents have risen and technological advances have transformed how we communicate.

That appetite for face-to-face contact has had to pause through the pandemic. The preference for interacting in person remains, however. The Savills Office FiT survey showed younger workers are keenest to return to the office. A quarter of respondents aged 18–24 said they expected to spend all their working hours in the office post-lockdown, the highest of any age group. For these younger workers the networking, collaboration, and mentoring opportunities offered in the office just can’t be replicated from a laptop on the kitchen table.

Birmingham is a young city. Almost a third, 32%, of Birmingham’s population is aged under 25, making it one of the youngest cities in Europe. That suggests the demand to get back to the office will be especially strong in Birmingham.

As is the case across the UK, office take-up has been significantly lower than usual in Birmingham city centre through 2020 but we expect more take-up activity will materialise as we head into 2021.

More than just a desk

City centre offices will need to offer employees more than just a desk and a coffee machine, which they can find more conveniently and often cheaper closer to home (see our previous article, Birmingham: Planning for future prosperity). Many large organisations share concerns that such prolonged time away from the office has had a negative impact on employees’ mental health, on company culture, and on professional development.

We anticipate this will accelerate the flight to quality, with offices that can facilitate collaboration, creativity and community in highest demand. Matt Hammond, the Midlands’ head of PwC, calls this the ‘work home’: a location as much about culture, learning, and connectivity as it is about productive output. While we expect there will be fewer people travelling to city centre offices each day, those that do will have a greater number of interactions, making those offices even more important to those occupiers and to Birmingham’s economy.

More than ever, occupiers and employees are demanding the highest-quality, well-designed office space. With businesses seeking to attract and retain the best staff, the building and space they occupy now serve as a key talent magnet. Occupiers will favour offices that encourage their employees to journey to the city centre. That means they need to offer an experience beyond just the working day. This is recognised by the owners of Three Snowhill who have invested in the delivery of a new a private ‘health hub’ facility within the building offering a holistic range of health and wellbeing services including a gym and also at the Colmore Building which offers gym, yoga and Pilates studios, and a private GP to help tempt workers in.

Adding attractive rooftop or street-level gardens and allotments, event and community spaces, and gallery space will help make these buildings destinations, rather than simply workplaces. Brindleyplace has led the way on this in the city for over 20 years with its vibrant blend of managed outdoor community spaces. Paradise now marks the latest chapter in Birmingham’s compelling history, a place rich in heritage and charm, and a new destination for the city. Paradise brings a new urban neighbourhood to life in the heart of Birmingham by creating a thriving hub of events, spaces, squares, restaurants and cafés for both visitors and workers.

And finally, the 26-storey 103 Colmore Row development, due for completion in 2022, will be a great example of a destination building. There, the top floor bar and restaurant will open their doors not just to commercial occupiers but to anyone wishing to enjoy the fantastic panoramic views of the city and surrounding areas.

Apartments at the heart of it all

Most new homes built in Birmingham are flats. Over two thirds, 69%, of homes built in Birmingham local authority between 2017 and 2019 were flats, compared to just 45% of homes built between 2014 and 2016. There has also been a rise in apartment delivery across the wider West Midlands Combined Authority (WMCA) too.

This shift toward flats reflects the location of those new homes. The proportion of new homes delivered in central Birmingham doubled from 2014–16 to 2017–19, fuelled by developments such as The Kettleworks in the Jewellery Quarter and Fabrick in Digbeth. Over 1,000 new homes are planned at both Digbeth Bus Garage and the Digbeth Estate, with substantial further development planned for the north of the city centre.

No more Help to Sell

Help to Buy is helping lower and middle-income families buy new homes within the WMCA. On average, families buying new homes in the WMCA buy a property 26% more expensive than families buying second hand homes, even though they have lower average incomes.

From 1 April 2021, Help to Buy properties in the West Midlands region face a value cap of £255,600. The average value of a Birmingham Help to Buy home in the year to June 2020 was £249,500. That suggests a substantial proportion of homes sold through Help to Buy in Birmingham had values above the proposed cap. The average Help to Buy home in Solihull was £326,200, more than £70,000 above the proposed cap.

This means developers will need to consider how they can continue attracting first-time buyers after Help to Buy changes. They will need to consider locations that allow them to deliver homes cheaper, while also offering access to outside spaces such as balconies, terraces and gardens. And they will need to design homes that facilitate working from home for those days people don’t need to be in the office.

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.