Half of Europe's major cities are finally starting to see office
rental growth - and Birmingham is among them.
The city rubs shoulders with Brussels, Berlin and Moscow in new
research from property consultancy CB Richard Ellis.
According to the firm's Global Rents report, 18 out of the 34
European markets surveyed are seeing off rental decline. In the UK,
this includes Birmingham and Manchester, with growth in London's
City and West End markets accelerating the fastest.
Although the signs are encouraging, Jamie Spires, a surveyor in
CBRE's office agency team in Birmingham, advises caution.
He said: "According to our research, Birmingham is beginning the
long, slow climb out of the trough. However, we do not believe
rents in the city will accelerate quickly."
The Birmingham Office Market Forum has recently reported take-up
of 101,565 sq ft for the first quarter of 2011. CBRE acted on four
of the top five deals, accounting for 55,851 sq ft of
lettings.
Mr Spires said: "Last year take-up of 668,392 sq ft was
achieved, so the quarterly average is down. However, it's fairly
typical to see a slow start to the year, with lettings accelerating
towards the back end."
Coutts is rumoured to have paid £28.50 per sq ft for the
top two floors of Standard Life's 45 Church Street.
Mr Spires said: "The Coutts deal achieved the highest rent this
quarter. It's some way short of the £33 per sq ft achieved at
the peak of the market in 2007, but I'm confident that rents won't
be returning south.
"The city's supply of Grade A space is dwindling, and with no
development pipeline to speak of, a handful of bigger deals will
quickly exacerbate this. Landlords will then be in a position to
hold out for better rents.
"Rents on second hand space will be slower to recover, but this
market will start to benefit from the Grade A absorption, in the
medium-longer term."