Volume A deals as a percentage of total office transactions in Birmingham continued to rise relative to long-term averages in the first half of 2022, with demand for workspaces that support wellness and target Net Zero goals soaring.
According to new data from commercial property specialist JLL, the average deal size for office space in Birmingham has fallen slightly from long-term averages.
In the first half of the year, the vacancy rate remained stable at around 7%, but the average physical size of the let offices fell by approximately 1,000 m².
The increased leasing of small to medium-sized offices is a noticeable change from the transactions of the past two years, with the average transaction size exceeding long-term trends.
Research from JLL Birmingham suggests that this is due to an increase in the activity of smaller users in the market combined with users adapting, or ‘correctly adapting’ their offices to use more hybrid works.
Despite a 15% decline in the volume of traded space in Birmingham during the first half of 2022, the first half of 2022 saw the highest number of transactions in five years.
JLL also found that the second quarter saw an increase in the total number of users requesting new space compared to previous quarters, with the professional services and education sectors mainly active.
There are a number of high profile developments due to be completed in 2022 including – One Centenary Way – which is expected to be completed before the end of the year which will accelerate delivery to the market and add to the 120,000 sq ft available for immediate occupancy on Three Snow Mountain. The offer will also be strengthened by major renovations, which will overtake new construction over the next 2 years to supply the market.
Kelvin Craddock, Director – Tenant Representation for JLL in the Midlands, said: “After a few turbulent years, there is no doubt that the companies we speak with are looking to the future and taking the time to find a more compelling employee. value proposition that will help attract and retain skilled talent amid increased competition. The deal numbers we’ve seen in H1 reflect that sentiment.
“Flexibility and a higher quality work environment for staff remains a top priority, with ESG requirements now being placed high on the demands of many users. We expect that the demand for more sustainable and socially responsible buildings in Birmingham will only increase in the future.”