Take-up

H1 2022 take-up, totalling 293,000 sq ft, was a 16% increase on the same period in 2021. Take-up in Q2 reached a total of 118,000 sq ft across 28 lettings. In terms of completed transactions, this was 33% above the five-year average for the market.

Grade A take-up of 217,000 sq ft accounted for 74% of the overall take-up in H1 2022, which represented an increase of 20% on the Grade A proportion in H1 2021. This is indicative of the continuing flight to quality in Birmingham as occupiers seek to move to a better standard of space.

Supply

Total supply decreased by 7% in the second quarter of 2022, standing at 1.5 million sq ft at quarter end. This represented a continuation of the trend towards dwindling supply for offices in the Birmingham city centre core market.

Prime Grade A supply significantly reduced this quarter to 178,000 sq ft. This represented a 13% decrease on the Q1 2022 total. As a result, there is now under half a year of available prime Grade A supply in the market as competition increases for the best-in-class space in Birmingham.

Take-up by business sector

The Professional sector was the most active in H1 2022, accounting for 32% of overall take-up. This included three transactions at 103 Colmore Row to RSM, Arcadis and Browne Jacobson. These three transactions, totalling 36,000 sq ft, accounted for over a third of Professional take-up in the first half of 2022.

Elsewhere, Public Services, Education and Health was the second most active sector, accounting for 26% of overall take-up. This included the 27,000 sq ft letting to Office of the Public Guardian, who expanded their space at Victoria Square House. This was the largest deal of H1 2022 in the Birmingham market.

Rents

Prime rent currently stands at £39.00 psf in Birmingham city centre. While there was no increase in H1 2022, the prime rent in the market has increased by 18% since 2017, and Savills expects that the prime headline rent will increase to at least £40.00 psf by the end of Q3. Equally, average Grade A rents have increased significantly over the past two years. The average Grade A rent in H1 2022 was £30.10, representing a 6.4% increase on 2021 and 32.4% on 2020

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View all of our latest H1 2022 Occupational Office Data research here.