Construction underway in Birmingham
Construction in Birmingham hit a 10 year high in 2016 with work starting on 1.45 million sq ft of new office space during the year, according to a new report by Deloitte.
The latest Deloitte Crane Survey shows a record-level increase in construction across the city centre, as Birmingham reinforces its place as a global destination for business, talent and tourism.
The report identifies a total of 1.45 million sq ft of new office space under construction in 2016, compared to 969,000 sq ft in the previous year.
The surge signals the highest level of activity since the report was first published in 2002, and confirms rising developer confidence.
“Improvements in transport links and major infrastructure works have opened up new development opportunities in areas that would have been considered peripheral just a few years ago,” said Edwin Bray, partner at Deloitte Real Estate and author of the Crane Survey.
“This really is a new era for the city as it grows and matures, expanding both upwards and outwards. “Developer confidence is reinforced by the growth in financial services businesses choosing to headquarter here, activity stimulated by HS2 and a previous lack of Grade A supply available for immediate office occupation.”
Similar trends are also seen across other sectors covered within the report, with an uptick in residential construction activity reaching levels not seen since 2005.
“The strong and sustained residential demand is seen in both the rental and owner occupier markets, with new schemes totalling 2,331 units spread across the city centre, Jewellery Quarter, Digbeth and Edgbaston," Bray added.
"Critically, there remain further sites across the city in demolition – which, whilst we don’t record these in the survey – shows a sustainable positive outlook."
This follows Birmingham City Council’s Big City Plan, announced in 2010, which set out an ambition to ensure the building of over 5,000 new homes in the next 10 years.
The latest Crane Survey also identifies over a thousand student bed-spaces in development illustrating the continued expansion of the student housing sector in Birmingham with demand for modern, high-quality accommodation encouraging investors to commit to the city. Two schemes are located near Aston University and one in the Chinatown area.
One sector highlighted in the report is health and life sciences, referencing the new Cancer and Rare diseases centre in Birmingham Children’s Hospital (82,333 sq ft), the first of its kind in the UK, which completes in Q4 2017.
This further strengthens the region’s reputation and offer in this sector, alongside the Queen Elizabeth Hospital and the recently opened £50m Birmingham Dental Hospital.
Bray said: “Our report underlines the fact that all sectors are active, supported by a genuine demand and a demonstrable pipeline for future opportunities.
"The city scores well on logistics, culture and heritage, connectivity, diversity, education and value for money - and its appeal continues to grow and spread across Europe and the world.”
Commenting on the research, Neil Rami, chief executive of Marketing Birmingham, the city’s inward investment agency, said: “Birmingham is embarking on an unprecedented construction spree, as it bids to meet record demand created from new and relocating businesses to the city as well as inward investors. All of this new development is part of Birmingham’s ongoing plan to turn itself into a thriving, globally competitive business location.
“Strong demand from global firms continues to fuel this renaissance – with business, professional and financial companies such as HSBC, Advanced and Lombard Risk, all choosing to invest in Birmingham. The city is the number one choice for young professionals relocating from London; this exodus underpins the demand in the city centre residential market.
“Major developments underway such as Paradise, Arena Central and Three Snowhill will transform the city’s skyline, with schemes such as HS2 and the £1bn Curzon Investment Plan set to galvanise the region’s global standing, driving forward the economy for generations to come.”