The Roaring Twenties 2.0
Q4 saw the start of a second wave of Covid-19 infections throughout the country as the government tried to contain the spread of the virus whilst trying to restart parts of the economy. Following a mutation of the virus in which its transmissibility increased, the rates of cases started to rapidly increase with large parts of the country ending 2020 facing the most draconian restrictions since Lockdown 1.0.
This has continued the trend of sub par take up figures for Birmingham’s city centre office market with 40,398 sq ft of take up recorded across the quarter. However, with positive news in the form of two approved vaccines and a bilateral trade agreement with Europe being announced at the very end of the year, looking ahead there are reasons to be optimistic as the light at the end of the tunnel burners brighter with every passing day as we edge closer to a return to normal.
The New Year has been seen by many as an opportunity to press the reset button following a year that has dramatically impacted both our professional and person lives. Businesses are optimistic about their post pandemic futures, particularly with a favourable bilateral agreement with Europe and are now creating strategies to take full advantage of the opportunities that will present themselves in the coming years.
We fully expect the workplace to be a vitally important element to many businesses going forward, especially to retain the very best talent and as an integral component of their corporate identity. However, occupiers have scrutinised their real estate footprints like never before over the course of the pandemic, with many now looking to evolve this key component of their operations rather than simply discarding it all together. Occupiers are demanding more from their real estate, and are likely to place an increased importance on zones that stimulate innovation and encourage collaboration amongst colleagues and clients. This will further drive efficiencies in their operations in buildings that meet their ever more stringent ESG credentials and promote the health and wellbeing of their staff.
103 Colmore Row
Whilst it is primarily younger members of staff that are desperate to return to the office to both aid their professional development and improve their mental wellbeing, as many have been forced to work from shared houses in bedrooms or on the kitchen table over the course of the pandemic. Being one of the youngest cities in Europe, with just under 40% of its population under 25 – Birmingham is well placed to record strong initial occupational levels once restrictions start to ease. Investors in the built environment have had to do some soul searching over the course of the pandemic, with occupiers demanding more than simply a structure to work from for their new office, with the pandemic accelerating trends which have been formulating in the office sector over the last couple of years. Although occupiers may take less space going forwards, there will be an emphasis on securing best in class accommodation. A flight to quality will be the result of this pandemic, with well capitalised investors who create inspirational and healthy workplaces of the future, in a low interest rate, post Brexit world, being best placed to secure healthy returns on their investment. Knight Frank remain positive about the Birmingham office market due to the fundamental market dynamics with demand outweighing supply. The city’s improving connections to the South East, and the implementation of recent local infrastructure improvements. Also create favourable conditions for businesses. Following irregularities in the form of Brexit and Covid-19, we see much smoother waters for businesses going forward and a vast amount of opportunity in Birmingham and its office market.