Birmingham’s flexible office sector set for further growth driven by tech sector

Having established itself as a key flexible office market in the UK, Birmingham has cemented this position further over the last few years as providers, occupiers and landlords, recognise the city’s potential to grow further within the sector. As a result, the flex office market in Birmingham has become increasingly more competitive with new co-working / serviced office providers entering the market such as the Jointworks within the Jewellery Quarter, previously a jewellery factory built in 1883 that is currently undergoing a redevelopment as a creative co-working space due to open this year. These new spaces have rivalled larger existing providers such as WeWork, IWG, Landmark and Orega.

This increase in supply has inevitably generated a greater variety in the flexible space on offer ranging from single coworking desks to large enterprise offices. The growth in demand has initiated the emergence of flex office clusters within the city particularly around Colmore Circus, which is home to Orega, Landmark, WeWork, iHub and Spaces, while in other parts of the city, Bruntwood and Alpha Works offer space for large and small scale enterprises. Whilst we have seen WeWork close two of its three centres in Birmingham, this was part of its global footprint reduction, and, as the Birmingham operations weren’t yet up and running, they were easier to close down.

Much of Birmingham’s office take-up has historically been driven by project-led work for some of the major infrastructure projects taking place in the city such as HS2. However, in recent years, we have seen a significant increase in demand from the tech sector and start-ups.  French artificial intelligence specialist ‘Sidetrade’, which has opened its sixth global office in 2020 at 4 St Philips Place in the city centre, is a great example. We expect that the attraction of the city will continue to prove popular with these types of occupiers, many of whom look to flexible offices in the first instance as they scale their business. Bruntwood Scitech’s acquisition of the Birmingham Innovation Centre, part of the West Midlands 5G Accelerator Programme, is a prime example of flexible office space that is recognising and accelerating the city’s tech scene.  With a campus in the heart of the Knowledge Quarter that currently offers over 80,000 sq ft of coworking, office space and business support for digital and tech businesses, it is also now starting on site to delivering a further 120,000 sq ft.

Unsurprisingly, we are currently witnessing a noticeable rise in landlords looking to deliver their own fitted and managed space in Birmingham where historically they would have only focussed on traditional space.

In-line with the overall flexible office market across the UK, activity levels in Birmingham have been muted over the last 10 months. Fluctuating vacancy levels as a result of the Covid-19 pandemic have seen business revaluate their real estate strategies causing providers to offer more competitive rates and flexible terms in order to win new clients as well as retain existing ones. Whilst companies based in flexible office space in the city will undoubtedly benefit from these incentivised rents as the market recovers, long-term the customer focus of the providers will prove invaluable as they look to capitalise on the pent up demand in the latter part of this year from those businesses both inside and outside of the city with decisions to make around their real estate strategies. 

Looking forward, Birmingham’s established position is a key city outside of London will be further elevated on a national and global scale with the scheduled completion of HS2 in 2028. The city’s flexible office sector is only set to benefit from this as corporates, tech scale ups and start-ups alike look to the city to establish a presence and grow.