Birmingham office rents in global top 50

Birmingham is among the world’s top 50 office locations according to latest research from CBRE.

The city is ranked 42 in the global listing, which is headed by central Hong Kong, with London’s West End in second place.

The countdown is based on the cost of occupying prime office space. More than 130 cities across the globe were surveyed and six UK regional cities feature in the top 50.

The data shows average office occupation costs – which including rents, business rates and service charges – in Birmingham are now US$ 69.64*/ £44.55 per sq ft per annum.

Comparative costs in other UK cities are:

City                                         Rank                           Cost per sq ft/pa

Manchester                              36                                US$ 71.91/£46.00

Edinburgh                                39 =                             US$ 70.31/£44.98

Aberdeen                                 39 =                             US$ 70.31/£44.98

Bristol                                        45                                US$ 65.62/£41.98

Glasgow                                    48                                US$ 64.72/£41.41

Ashley Hancox, CBRE’s head of regional office agency, said: “Although rents have remained static in Birmingham over the last year, the city has maintained its position in the global top 50.”

According to Mr Hancox, the city is also able to demonstrate many of the qualities of aspirational office locations around the world.

Ashley Hancox

The CBRE research shows that the typical characteristics of the most progressive office markets around the globe include a diversified economic base; a defined central business district; superior public transport and constraints on office supply.

Mr Hancox said: “A thriving industrial base undoubtedly benefits the office market. The rising fortunes of the region’s innovative manufacturers, such as VAX, is a good example, similarly we hope the current good fortunes of the motor industry will support the finance and business sector in the city centre indirectly, if not directly.  In fringe markets we have seen take-up by the likes of Rolls Royce and this bolsters rents across the whole region, including city centres.

“Birmingham’s central business district is clearly defined and the activities of the Colmore BID team and the Birmingham Office Market Forum are helping it gain recognition.

“Improvements to the city’s transport infrastructure are already underway with New Street station; work on the Metro extension is not far off, while HighSpeed 2 could make a massive difference to capacity and the ability to north-shore jobs. The runway extension at Birmingham Airport will be a massive improvement to the city’s global connectivity, particularly to trading partners in the Far East and Western seaboard of the USA.

“Finally, the inevitable absorption of Grade A space in the city means supply is diminishing. Once the remaining, large floor plate space at One Snowhill, Colmore Plaza and Two Colmore Square has been taken up, the only new build to come on stream before 2015 – and probably beyond – will be Two Snowhill.  As a result, rents will undoubtedly begin to move north in the not too distant future.”

Although among the world’s most expensive locations, Mr Hancox says Birmingham office rents remain competitive.

The price comparison between the UK regional cities comes down to pounds. Compare that with the global top five, where occupation costs vary from US$171.53/£109.68 (Moscow) and US$248.83/£159.10 (Hong Kong central). London’s West End is US$220.15/£140.80.

Mr Hancox said: “Nationally, we are keeping up with our regional rivals, but globally we look like good value.

“It is also important to remember that building occupation cost is only one yardstick. Birmingham has a lot to offer inward investors in terms of the cost of living, quality of life and, as the biggest city outside London, access to a pool of well educated, highly skilled and cost effective people across a wide range of business sectors.”

* Note:

The CBRE research ranks cities by occupancy cost in US$/per sq ft/per annum.

The currency was converted into UK£ based on the prevailing exchange rate of 1.0 US$ = 0.640 UK£ prevailing on 20 July 2012