Small requirements (below 10,000 sq ft) will drive
At an Economic and Property Market Seminar, hosted in the city today by the global consultancy firm, Jonathan Fear, head of JLL’s office team in Birmingham, predicted that total city-centre take-up for the year would exceed the five-year annual average.
However, he admitted the figure was inflated by Birmingham city council’s letting of nearly 200,000 sq ft at Birmingham Science Park in Aston.
Fear said: “While we have seen an increase in occupier demand over recent weeks, we do not expect this to translate into a higher volume of activity over the final quarter, but believe these requirements will instead feed activity in 2010.”
The agent warned that supply levels of grade B stock were increasing and that overall vacancy rates were likely to remain high, although selective shortages for grade A space could appear in 2011.
The result is likely to be a larger gap between prime and secondary rents. The firm believes the former are likely to bottom out next year.
In contrast, JLL believes
Ed Gamble, head of JLL’s investment team in
Speaking at the seminar, he said: “The renewed weight of demand for prime office buildings means it is our view that the prime yield for well-located offices with unexpired lease terms over 10 years has moved in from 7.00% to 6.25%.”
