Birmingham is set to see its best take-up figures since 2008, according to Savills latest office market bulletin.
Savills predicts that take-up figures in the prime core office market could reach 450,000 sq ft by the end of 2011 – the highest recorded since 2008.
Director of offices Nick Williams said: “Take-up figures so far this year are up by 23% on the same time in 2010. With two significant lettings in the last quarter of the year to accountants Grant Thornton and The Law Society, we anticipate that we will exceed 2010 numbers by up to 40%.
“While the market remains highly challenging, the supply/demand dynamic is changing and this will start to impact on deal structure.”
The lack of development pipeline continues to have an effect on the supply of grade A space, accounting for only 52% of total supply in Q3, down from 66% at the end of 2009. Vacancy rates are also falling due to the lack of new space. Vacancy was down from 17.6% at the end of 2009 to 15.7% at the end of the third quarter in 2011.
Prime rents have remained consistent at £28.50 throughout 2011, said Savills.
Williams added: “Despite ongoing economic uncertainty, the Birmingham office market has shown clear signs of recovery and while we don’t anticipate any drastic upturn in 2012 we are of the view that next year will see a shift in market balance as stock levels, particularly grade A, start to limit options and landlord flexibility.”
lisa.pilkington@estatesgazette.com
