The redevelopment of Typhoo Wharf and surrounding sites is set to accelerate the emergence of a new creative and technology hub taking shape just east of Birmingham’s city centre.
By the early 2020s, the £200m Gooch Estate-owned site in Digbeth, one of Birmingham’s oldest industrial districts, will be home to new office space and other amenities that will anchor Digbeth more closely to the city centre while laying the foundations to transform it into a new knowledge quarter.
The 10-acre development site, which includes the former Typhoo Tea building, is adjacent to Curzon Street HS2 station and it will consist mainly of office space.
Jon Andrews, director of developer Stoford, hopes to attract large occupiers such as media companies and says it will also target educational uses and potentially residential. A PRS scheme is on the cards, as well as a hotel of around 200 beds.
“It will be a real mixed bag with some new-build and some refurbishment,” says Andrews.
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Depending on the height restrictions imposed by planners, the development is expected to total around 750,000 sq ft on Typhoo Wharf itself and up to 1m sq ft when adjoining sites that belong to the estate are taken into account.
It is one of the most significant development opportunities in the city, says David Tonks, head of Birmingham at Cushman & Wakefield. “Typhoo Wharf will have as big an impact as Brindleyplace,” he goes so far as to say. “It could become a new centre of gravity in the city.”
The scheme, which is set to get under way next summer, will create a new and well-located city centre asset in a neighbourhood that is relatively underdeveloped and unknown to many outside the creative industries and the art world - for whom it is already an established hub.
The lack of awareness is partly down to its industrial past and partly down to lack of easy access, believes Barry Allen, head of Savills’ Birmingham office. “It is slightly fractured from the city centre chiefly by the rail line but also the road infrastructure and other buildings,” he says.
“It is not quite obvious how you get down there. One of the challenges we are working on with the council will be to reinforce and improve the permeability and wayfinding into Digbeth.”
The development marks the revival of a wider and long-planned process that had been put on hold and is only now being reignited by the activity around Curzon Street thanks to HS2.
“Some buildings changed use in Digbeth in the last economic cycle but that slowed down at the time of the last economic crisis,” explains Andrews. “This development is in some ways picking up where that left off.”
A major upside is the improved transport links in and around the site, which will change dramatically over the next five to 10 years. HS2 is just one element. Typhoo Wharf is 50m from the tram station, which is due to be operational by 2023. In the same year, work on the Curzon Street station superstructure will start on site.
“The activity over the next few years will be intense in terms of new infrastructure investment,” says Andrews.
Tonks adds: “As well as the arrival of HS2, the tram will be a huge change, coming right through the centre of the sites. It is a significant piece of infrastructure, arguably more significant locally than HS2, offering better access for local employees.”
Occupiers from the creative and digital industries already work in landmark schemes such as the Custard Factory and the internationally recognised Fazeley Studios. The aim is to create a development that adds further impetus to a much larger creative cluster.
Greater Birmingham is already home to more than 7,500 technology businesses employing nearly 40,000 people in the city. There is a wider tech cluster in the Midlands too, comprising more than 200,000 businesses that contribute £6.4bn to the regional economy.
Typhoo Wharf will create unprecedented opportunities for start-ups to launch and thrive
The city also has a vibrant start-up culture. New business registrations increased by 25% in 2016 to 17,473 - more than any other city outside London. “There’s a hotbed of talent here and Typhoo Wharf will create unprecedented opportunities for start-ups to launch and thrive,” says Steve Hollis, chair of Greater Birmingham Solihull LEP.
The Typhoo Wharf scheme will offer greater choice to occupiers, believes Allen. “Digbeth is already home to digital media companies, both start-ups and mature companies, as well as some TV film production companies, games designers and digital 3D imaging,” he says. “It is all going on almost behind closed doors at the moment, but it will become more obvious as Digbeth becomes an improved place.”
Allen expects bigger corporates to consider Digbeth too, thanks to its access to graduates just a few hundred yards away at Birmingham City University, as well as its proximity to HS2.
“It has all the ingredients to make it an interesting place,” he says. “It will be an attractive place for employees and very different to corporate environments. We have an emerging strong offer of core grade A buildings, but that type of building does not suit everyone. The grade of buildings in and around Typhoo Wharf will be of a slightly different nature and that diversifies the offer of Birmingham.”
Allen highlights Channel 4, which is reportedly in the market for space in the area. “Would it go into any office building in the middle of the city core or might it look at a new building in the creative district? It is an interesting question and at least it now has a choice.”
The mix of buildings in Digbeth could also stimulate strong demand because, as Tonks points out, they will be available on shorter leases and offer greater flexibility. It is a trend likely to be assisted by IFRS accounting rules, which will force companies to put operating leases on their balance sheets.
As the cluster grows, rents can be expected to rise. “As soon as there is critical mass, there will be rent inflation,” says Tonks.
Typhoo Wharf also fits into council plans to create a larger knowledge hub. Dubbed STEAMhouse - which stands for science, tech, engineering, art and mathematics - the aim is to stimulate economic growth at scale by co-locating teaching, research, small businesses, product testing and production.
The redevelopment will mark one of the final steps towards the city’s goal of becoming a thriving regional powerhouse. “We’ve all read the headlines about the airport and Grand Central, but we’ve yet to see the impact of a major increase in footfall from major employers like HSBC, which will have a knock-on effect of supporting other occupier groups and sectors,” says Tonks. “It is a step towards where we want to be as a regional capital and as an alternative to London.
“I can see Typhoo Wharf as the Shoreditch of Birmingham. We already have some interesting F&B there and we will see technology, software, medical and all sorts of other companies come in. The area’s ability to help occupiers attract and retain talent will be absolutely key. It is a bit edgier than the established professional core but just as accessible and a little bit more diverse in its offering.”
The area already has many of the trappings that young, tech-savvy workers are after, adds Tonks. “They want close proximity to good F&B offerings, to transport,” he elaborates. “They don’t want to be in the prime CBD. It is more a way of working they are after than a place to work.”
To help create the right environment for them, the development will have to be sensitive to its industrial heritage.
“Where elsewhere in Birmingham there has been complete clearance for larger regeneration, this needs to be redeveloped rather than cleared,” says Andrews. “Digbeth is a conservation area with canals and railway viaducts - all ingredients that make it an interesting place to be for the creative industry sector. The new development will have to adapt to that rub of the grain.”
It will also need to be balanced against commercial imperatives. “Density will be a challenge [in terms of] getting a return that justifies the fixed investment cost, but it strikes me as an obvious place to develop,” says Tonks.
“It is well underpinned in terms of location and the end-user market is already pretty well established.”
It’s still early days for Typhoo Wharf, but with the arrival of HS2, the support of the council, an existing creative sector and industrial heritage, the ingredients are in place to make the project a success.