West Midlands office review by Sharon Fountain, property expert at Bruton Knowles in Birmingham

In recent months it has been reported that across the UK, demand for office space is rising at the quickest pace for 4½ years. The office market across the West Midlands appears no different and continues to reflect strong demand that is failing to be met by supply. More and more business occupiers are opting for freehold ownership rather than leasehold, particularly encouraged by low interest rates. Similarly, across the region there is also limited new Grade A leasehold office options. Schemes such Baskerville House in Centenary Square and The Forum at Birmingham Business Park are offering exciting and modern development, but there is a distinct lack of any new schemes coming online at the moment that would potentially appeal to businesses.

Despite the shortage of quality office space, Bruton Knowles is presently witnessing a high level of enquiries showing all the signs that the leasehold market is starting to improve. It has also advised on a number of lettings of prime office space across the City Centre including Beaufort House, Newhall Street and No 1 Hagley Road. Birmingham is still seen to be suffering from a lack of inward investors. Demand for commercial property in the West Midlands is coming mainly from owner occupiers and investors seeking Freehold property and leaves demand outweighing supply.

Out of town locations could prove to be an attractive alternative to companies within the West Midlands. But as the ‘City Living’ concept in Birmingham becomes more and more established, it is worth noting that one of the major attractions of the city is its ability to provide retail, leisure, residential and office space in the same area. Out of Town schemes such as Arlington's Birmingham Business Park may be able to cash in on the shortage of city centre office space as there is still a severe lack of new development in the pipeline but this is balanced by a rise in popularity of working and living in an urban area such as Birmingham.

The lack of suitable office space is having a positive effect on the secondary office market. A rise in demand for secondary office suites has prompted some landlords to revamp their secondary office space. Many existing buildings are being redeveloped or refurbished and can provide office space that is just as attractive as brand new space to potential occupiers. Continuous advances in technology, even improved air conditioning facilities, enable even the most unusual locations or ageing buildings to provide an ideal office environment.

Whilst the shortfall of offices in the West Midlands continues to make headlines at the moment, it is worth noting that the mid to long term prospects look far more positive. There are a number of new developments which will provide the much needed space in the next three to four years. Alongside this is the real possibility that any large public sector requirements will have to seriously consider what Birmingham can offer.