Birmingham office rents now mid-table

Ashley Hancox, head of regional office agency at CB Richard Ellis

It is now £2.50 per sq ft more to occupy leased offices in Manchester than it is in Birmingham, according to CB Richard Ellis’s Global Office Rents survey.

Rents, rates and service charges now total £44.50 per sq ft in Manchester, the world’s 22nd most expensive office centre, compared to £42 per sq ft in Birmingham, which is 27th out of the world’s top 50. Edinburgh, also at 22nd, joins Manchester as the UK’s most expensive regional city.

Two other regional cities make the CBRE top 50: Glasgow, 31st at £40 per sq ft and Leeds, which at £36 per sq ft is 40th. London’s West End tops the international poll at a whopping £120.50 per sq ft.

Ashley Hancox, head of regional office agency at CBRE, said the survey demonstrated that when it came to price, there wasn’t much to choose between the region’s top office markets.

“At the moment, there are just a few pounds between Birmingham and Manchester. With price being only part of the relocation equation, Birmingham must demonstrate that it has other things to offer, in particular a talented labour pool.

“The quality and quantity of space on offer here is also a key selling point. We have a good selection of BREEAM excellent buildings here, and the choice is good, whatever your preference for location or style.

“In contrast, in Manchester Grade A office accommodation is becoming more scarce – there are even rumours of Dutch auctions over space in the city. As a result, we expect rents will start to increase and incentives reduce there soon, whilst in Birmingham they will be stable until some of the existing stock is depleted.”

The gulf between Birmingham and the capital, however, remains massive.

London’s West End is the world’s most expensive office market, at £120.50 per sq ft, whilst the City of London ranks eighth at £72.50.

Mr Hancox said: “These figures underline why the government is looking to shed some of its London property overheads in favour of regional bases. Before he came into power David Cameron pledged that he would continue the programme of civil service relocations and, with a massive deficit to plug, it’s likely he will have little choice.

“Birmingham has cost, space and labour advantages. We are well placed to capture some of these relocations; the city is working hard to seize opportunities as they arise.”

But Birmingham isn’t just looking at the domestic market. Increasingly, in its ambitions to be a global city, it is looking to capture overseas investors.

Marketing Birmingham is developing a business plan to attract new inward investment in high value, growth sectors.

Among those identified are shared services and medical technologies.

Mr Hancox said: “The Indian markets have cornered the shared services sector. But rents in Mumbai, at £82.84 per sq ft, are now the 4th most expensive in the world, while New Delhi, at £63.83 per sq ft, is 11th.

From an office cost perspective, Birmingham is more than competitive. What’s more, a back-shoring trend has already started, as employment costs in those markets start to catch up with property prices.

“Similarly, Geneva and Zurich have become synonymous with medical technologies. Both are in the top 20, with rents of £52.86 and £51.70 per sq ft respectively. Birmingham can offer a 20 per cent saving.

“Like the city’s football teams, Birmingham office rents are mid-table. But unlike the Premier League, this isn’t a bad place to be. It means we retain our ranking as a major player, but are highly competitive when it comes to attracting investors.”

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