Spotlight on Birmingham:

Birmingham is rapidly becoming one of the fastest growing flexible office markets in the UK and Europe and was noted as a top 10 growing hotspot for flexible offices in 2019 and 2020 in a recent Savills/ Workthere report. In the last two years this has been driven by the high demand for project-led space in relation to some of the major infrastructure projects in Birmingham, however we are now seeing a growth in demand from start-ups, in particular those across the digital and creative sectors, as Birmingham emerges as a centre for innovation.

The increase in project-led space for work on some of the major infrastructure projects taking place in Birmingham, such as HS2, resulted in a large number of existing serviced office providers expanding their presence in the city over the course of the last two years, including iHub, Orega and Regus. More recently we also saw BE Offices sign for 38,162 sq ft at Somerset House.

Many of these spaces have been more focused on the professional end of the market. Birmingham only has a handful of more trendy spaces aimed at the start-up and scale-up community, with the Custard Factory in Digbeth or the Old Print Works to the south of the city centre more attractive to the creative and digital start-ups. But it is the growing start-up scene in Birmingham that is leading the charge for the next phase of providers seeking to enter the market. There are currently active requirements from a number of well-known national and global co-working brands seeking their first space in the city.

Birmingham has arguably been overlooked compared to national rivals like Manchester and Bristol in the last two years. Yet the city has undergone a significant reinvention with a vibrant central business district, outstanding restaurants and some of the best shopping outside of London. Furthermore, according to the latest Barclays and BGF Entrepreneurs Index Report, The Midlands has the highest proportion of companies in the UK that are considered “high-growth”, adding to its overall appeal for both start ups and corporate businesses.

The appeal of Birmingham as a growing hub for flexible workspace is highlighted in Savills research with serviced office providers accounting for 21 per cent of total office take up in the city (207,800 sq ft), compared to no take-up at all in 2016. 2018 saw a further increase with serviced offices and flexible workspace providers contributing to 30 per cent of office take up (226,460 sq ft).   

Desk rates at the top end of the market in the City centre are around £400 per workstation (per month), whilst average desk rates are £325 per workstation, dropping to £225 per workstation in more fringe areas.

As with all markets that have seen a significant growth in serviced and flexible office take-up, the key for any providers will be to differentiate their product in the market in order to remain viable and sustainable. The competition in the sector in now heating up and having a distinguished product that not only delivers in line with market demand, but can also diversify with changing needs, is vital.