Editors Note: The following content is an opinion piece from Scott Rutherford, Partner, Office Agency at Cushman & Wakefield in Birmingham – outlining his thoughts on the outlook for the Birmingham property market in 2021.
Whilst to be expected, we will enter 2021 with significant caution given the uncertainty of the economic consequences of both the COVID-19 pandemic and our new trading relationships with the EU. However, there are reasons to be cautiously optimistic for improving prospects within Birmingham and the West Midlands.
Whilst the majority of the city’s office-based workforce has been working from home, there has been some notable progress around the City Centre, with the construction of 103 Colmore Row and the Paradise development making visually impressive additions to the city core. Although there is an acknowledgement that there may be a higher degree of flexible and agile working in the near term, the collaborative and social element of the office will be attractive again and we will see the return of more employees into our cities once it is safe to commute.
The Grand Hotel is also complete and open prior to a major launch early in 2021. It is fantastic to see this former vacant space in heart of the CBD now filled with an impressive addition to the city’s hospitality sector.
The tram works to Centenary Square are now complete and will soon operate beyond Fiveways. The link via Digbeth to the new HS2 Station has also recently begun in earnest.
In addition, the prospect of further progress and preparations for the Commonwealth Games will give added focus to the improved feel of the City as we move towards the reality of the Games commencement in 2022.
In terms of property predictions, the reimagining and repurposing of some retail assets will be a significant driver of change and purpose – the House of Fraser building and its potential change of use is an example of how the structural change in our shopping habits, long before the pandemic, is transforming our city centres. Logistics continues on its steep growth trajectory and dominates the property headlines resulting in record rental levels (£8.00 +) and yield compression where we will see major transactions at sub 3.5%. Given the relative[ly] low level of office supply across the region we may see pockets of competition for new and existing supply across the region in the latter half of the year as occupiers crystalise their requirements and seek to acquire the best space available.
Overall, as we return to a greater feeling of normality, as well as a better work and life balance, Birmingham along with the other towns and cities will see its prospects improve in 2021.