Take-up

In the final quarter of 2023, take-up totalled 240,000 sq ft across 37 deals done, with 19 more deals done than Q3 2023. This was the highest quarterly take-up of 2023, and 14% higher than the same period in 2022. Grade A take-up accounted for 74% of the total, equating to 177,000 sq ft, and was 68% higher than Q4 2022.

Annual take-up totalled 703,000 sq ft, the highest take-up since 2019, and 1% higher than 2022. The largest deal of the year was at 6 Brindley Place, where Lloyds Bank acquired 60,000 sq ft of Grade A space.

Supply

Availability in the final quarter of 2023 amounted to 2 million sq ft, which was 3% lower than Q3 2023. However, this continues to be higher than the same period in 2022 by 19%.

There is 1.3 million sq ft of Prime and Grade A space which accounts for 65% of the total supply, with 485,000 sq ft being Prime best-in-class space. Secondary space amounts to 696,000 sq ft, therefore accounting for 35%. Total vacancy rates have decreased to 10.8% from 11% in Q3. Similarly, Grade A vacancy rates have decreased marginally to 2.6%, down 30 basis points on Q3 2023.

Take-up by business sector

The sector that leased the largest total space in Q4 2023 was the 'Professional' sector, totalling over 81,000 sq ft, accounting for 35% of the total take-up. This is the largest take-up in the sector since Q1 2016, and was largely driven by the acquisition of 32,000 sq ft at One Centenary Way by Mills & Reeve.

The sector which leased the second highest quantum of space was the 'Public Services, Education & Health' sector, with a combined total of over 80,000 sq ft. The largest deal in the sector was by Global Banking School, which leased 29,000 sq ft at Norfolk House.

Rents

The Prime rent currently stands at £41 per sq ft, with Birmingham experiencing 19% Prime rental growth since the end of 2019. Looking forward, against a backdrop of in-demand Prime supply and an extremely thin development pipeline, forecasts expect the Prime rent to grow by a further 17% over the next five years to approximately £48 per sq ft by the end of 2028.

Interested in other areas of the UK?

View all of our latest Q4 2023 Occupational Office Data research here.