The ‘northern powerhouse’ drive has boosted cities in the north, but the ‘Midlands engine’ is also motoring ahead, as shown by the high places of Birmingham, Solihull, Dudley and Coventry in Property Week’s Hot 100 offices list.
The HS2 rail project is being hailed as a boost for Birmingham in particular, with a host of new office developments under way in anticipation of increased tenant demand.
Yet Birmingham is just one part of the picture in the Midlands. Solihull and Coventry are also attracting increased tenant demand in the wake of the government’s spending drive.
There is currently a steady stream of demand from local businesses for office space, which we expect to be complemented by businesses being attracted to the city from other regions.
Demand for office space in the West Midlands should continue to rise, with Warwick and Coventry universities producing a steady supply of graduates increasingly likely to remain in the region to work as a result of recent regeneration projects.
The draw of lower rents with London still close by once HS2 is complete will also draw the eye of businesses in the capital, and so we expect new kinds of tenants to set up camp in the West Midlands in the coming years. In particular, the percentage of financial services firms with a presence in the Midlands may rise as this trend kicks in.
It is well known, though, that despite this likely increase in demand, grade-A office space in the West Midlands is in short supply. In our view, to meet this demand the refurbishment of existing space will be crucial.
In the coming years, we expect to see space once deemed not fit for purpose in Solihull, Coventry and Birmingham transformed to suit tenant needs.
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