Overcoming Anxiety

With all the talk of credit crunch, a collapse in mortgages and increase in repossessions it seems all too easy to talk ourselves into a self-fulfilling prophecy of recession. In the construction and property market however, the continued regeneration of Birmingham and the investment by the public sector in projects such as New Street Station and the new Library of Birmingham continues to keep the city a great place to do business and invest and bodes well for it's continued renewal.

A recent article in the Birmingham Post, Faithful+Gould chief says confidence still high in Birmingham, showed there is still confidence despite the current pinch being felt with 'the Birmingham market taking a positive view and planned projects generally unaffected, particularly with medium to long term schemes'.

"We are also finding that construction is being boosted by spend within the public sector, thanks to an increase in local authority schemes such as the Central Library and New Street Station; education projects such as the new Birmingham City University campus at Eastside and Building Schools for the Future schemes; health projects such as the University Hospital Birmingham NHS Foundation Trust; and major rail infrastructure schemes."

This confidence is further emphasised by the increase in take-up of office space in Birmingham. Mortgages for business reports, Birmingham office take-up increases , that figures accumulated from agencies in the city show 'take-up of office space was 171,746 sq ft in the first quarter of 2008 - a rise of 35 per cent on the same time in 2007'.

Overall office availability in central Birmingham presently stands at 2.1 million sq ft, with the definition of what constitutes city centre having just been expanded by the Birmingham Office Market Forum and Costar to include fringe areas such as Edgbaston, Digbeth and Aston Science Park.


A recent example of this office confidence was shown in the announcement by Wragge and Co to take floors 4 to 11 in Ballymore's Snow Hill 2, Wragges signs lease on new Birmingham HQ representing 'the largest pre-let in the centre of Birmingham by a factor of two'. Globest.com, a US Commercial Real Estate News and Property Resource described Birmingham as better positioned than the rest of the UK in the current climate, Wragge Leases 250,000 SF in Two Snowhill.

Probert says the market, the second largest in the country after London, has about 15 million sf of total office stock, with an average absorption rate of about 500,000 sf of class A space per year. “We’ve taken half of that in one fell swoop,” he says. The rest of national market is slow, he says. “We’re off the boil, everyone is very cautious reacting to the global doom and gloom. There’s been oversupply rumors,” Probert says. “But in Birmingham, investment values are better positioned, and the recent leases seem to be indicative of confidence.”



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