Record year for M42 office market

Record year for M42 office market

The out-of-town office market in the M42 corridor saw an outstanding level of transactional activity last year, outstripping pre-recessionary levels.

The figures, which are compiled by property adviser Bilfinger GVA, show total activity in Solihull Town Centre and throughout the area’s business parks reached 489,687 sq ft across 2015, placing it well ahead of 2014’s total of 419,951 sq ft.

The figures were boosted by a number of stand-out deals throughout the year including the sale and leaseback of Interserve’s 113,657 sq ft International House near Birmingham Airport; the 24,843 sq ft letting to Changan Automotive and 19,625 sq ft letting to BT at Birmingham Business Park; and National Grid’s 46,000 sq ft letting in Solihull town centre.

The figures also show an increasing number of deals completed in excess of 10,000 sq ft, demonstrating a sharp uplift in demand from occupiers for larger office spaces.

Adrian Griffith, director at Bilfinger GVA, said: “These figures are exceptional, driven by consecutive levels of activity across all four quarters of last year.

“We’ve seen an increasing number of deals completed in excess of 10,000 sq ft, with six in Q4 of 2015 alone. This is in stark contrast to the sub 5,000 and 10,000 sq ft that we’ve seen in previous years.

“Since October 2013 the enquiry level in the M42 market has rocketed. With limited stock, there are few opportunities for occupiers to negotiate against, which is why over the last two years we’ve seen rents return to their pre-recessionary 2007 levels.

“We’re now regularly seeing rental figures over £20 per sq ft at locations like Birmingham Business Park, with rents north of £22 per sq ft likely to become increasingly common.

“With little in the way of new developments coming forward, these increases reflect the quality of refurbishments taking place on existing stock.”