Office supply in Birmingham has shrunk to below 2.4m sq ft – the lowest in three years - as new stock delivery into the market has slowed.
According to new research from CBRE, available space shrank by 9% in Q2 of this year, despite take-up of just 110,300 sq ft during the period.
For the first half of 2025, total take-up was 184,100 sq ft, 50% lower than the same period last year.
Although recent take-up levels are on the low side, the reduction in available space and thin pipeline – including no new build speculative development in the city core - is more concerning.
Theo Holmes, senior director and head of Office Agency at CBRE in Birmingham, said: “There are currently active enquiries in the market for more than 750,000 sq ft, with a further circa 400,000 sq ft in legals. Take-up for the year is therefore on target to meet the five-year average of circa 680,000 sq ft.
“Of the 14.9% of total stock now available, only 1.2% is new build Grade A. Occupiers have recently shown a strong preference for new build space, but with very little in the pipeline those with two to three year lease events are having to plan their move now and consider the new generation of quality back-to-frame refurbishments.”
Prime rents in the city are now £46.00, a historic high showing year-on-year growth of 4.6% since the pandemic and 6.4% across the last 12 months. Whilst this is encouraging for developers and investors, other market forces are holding them back.
Holmes said: “High borrowing costs, rising construction costs and general economic uncertainty have forced developers to push the pause button. But where developers have delivered speculative space, such as MEPC and Federated Hermes at Paradise, they have been rewarded: Paradise is now approaching 100% committed.”
The refurbishment of Multistory, 35 Newhall Street and Colmore Gate, plus the back-to-frame redevelopment of 19 Cornwall Street will create 466,000 sq ft of new Grade A space. Enquiries for these developments are already encouraging with several floors already under offer.
“With stock levels set to lower from 2026 onwards, occupier choice is reducing fast and we’re entering a pre-let market. Due to the development complexities highlighted, engagement is required now to meet lease events 24 months plus away.” Holmes said.
