Birmingham Office Prices “too hot” for Market
Recent figures released by Cushman & Wakefield on the conventional office market in Birmingham show that the West Midlands region enjoyed the second-highest rate of deals in the first half of 2010.
The research states that only the South East recorded more office deals in this time-frame, and on a national scale, transactions totalled ┬ú1.6billion – an increase of 90% year-on-year.
However, despite the encouragement shown in the first half of the year, Cushman & Wakefield have warned that the ‘office market recession’ is not yet over.
Scott Rutherford of the company’s Birmingham office commented that despite an encouraging amount of deals in the first quarter, Q3 had been quiet, and pricing was now under pressure.
According to The Birmingham Post, he said:
“There was a lot of activity at the end of last year, and prices went up accordingly,” he said. “However, everything had in fact got too ‘hot’, and there has been a reaction from the market, which has seen prices coming down again to a more realistic level.”
Similar trends were recorded in the serviced office market, as the West Midlands region experienced a 16% rise in the average cost per workstation in Q1 2010 when compared with the same period in 2009. However this was then followed up in Q2 and Q3 by a year-on-year drop in prices.
Despite this, in 2010 to date (Jan-Sep) the region is currently recording an average price per workstation of just -7% lower than 2009.
Cushman & Wakefield claim that the conventional West Midlands office market saw more caution throughout the first half of the year, and the same could be said for the serviced office industry, as 2010 stats show a marked increase in enquiries but placements are currently on a par with last year. This shows that while there are a higher number of businesses interested in serviced offices, there is currently no increase in commitment.
However, there is plenty of room for change as we enter the fourth and final quarter of 2010.
Serviced office trends throughout the UK will be explored further this month (October 2010), when officebroker.com releases its next round of quarterly Serviced Office Reviews, focussing on Q3. These reports are created using officebroker.com data, touching on year-on-year comparisons for every UK region, regarding enquiries, placements, workstation prices and more.
Visit officebroker.com’s Stats & Facts page for the latest reports, and keep an eye on the Blog for details of the next round of research which will be available to download for free later this month.