Offices space rental in the West Midlands is likely to be stagnant in 2012 and beyond, according to a latest report by commercial property consultancy Lambert Smith Hampton.
Only Central London and the South may see some growth, it adds. The availability of office space in the West Midlands also continues to be high. Much of this availability is seen in the case of lower grade office stock as opposed to Grade A offices.
The availability levels have witnessed an upward spike, and are inching close to 2009’s highs. There are also fears that the West Midlands may suffer a scarcity of prime office space in the future as demand surpasses supply. For instance, there is just a little more than 250,000 square feet of office space in Birmingham, but out-of-town markets and the city centre are flooded with second-tier as well as tertiary office space.
Birmingham’s prime office rents fell by 15 per cent during the recessionary period while non-prime office space outside the region also saw a decline as a result of poor market conditions. The rents held up, however, in Leicester and Nottingham.
Lambert Smith Hampton said that a gloomy market has impacted the West Midlands’ office sector, with speculative builders anticipating a low demand and regeneration projects being almost non-existent. The supply, at the moment, is coming only from second-hand office space, and the take-up has not met the long-term average. The firm said that if the market situation improves, lease incentives could see a reduction next year.