Landlord raises alarm about pace of Birmingham office lettings.
Potential occupiers are taking too long to mull over their office requirements in Birmingham, one of the city’s leading landlords has warned at a Built Environment Networking conference.
Richard Norgove, property director at Hortons Estates, said at the West Midlands Development & Regeneration Plans conference, that he was concerned about the upcoming pipeline of prospective occupiers: “The concerns we have about are where the occupiers are coming from: occupiers are taking their time to make decisions.”
But he said that Norton had already succeeded in letting 95% of the office space at the company’s Colmore Row project, which is due to open by spring 2019, with tenants of the revamped grade 2* listed Grand Hotel including MediaCom and Hiscox.
He also said the estate, which has been one of Birmingham city centre’s major landlords since its foundation in the 19th century, had secured a lease with an operator for the hotel element of the scheme and that all of its retail units had been let.
Beyond Birmingham city centre, Hortons’ development pipeline includes a 55,000 sq ft speculative development at Aldridge in the Black Country, which started on site in September and is due to reach practical completion in April. The planning has been secured and enabling works are underway at Prime Point 14, which consists of two units comprising 66,000 sq ft and 78,000 sq ft.
And despite concerns about upcoming tenant demand, he hailed the wave of investment that England’s second city had seen over recent years. “Birmingham is going through a great deal of development. Over the last few years, it has been wonderful to see the amount of investment coming in. The wave of investment has been fantastic and would be great to see that momentum carry on.”
Richard Probert, project director for Ballymore’s Snowhill project, said that the co-working space provider WeWork is targeting Birmingham: “WeWork are coming here: they’ve done a lot in London and are currently looking at Manchester but Birmingham is on their agenda for next year,” adding that co-working is an “incredibly important part of our lettings strategy”.
Probert said that the next total phase of Ballymore’s Snow Hill scheme, comprising 400,000 sq ft, was due to complete in the first half of 2019. He said that 10 of Snow Hill 3’s 17 storeys had been erected, work on cladding the scheme had already begun and that its steel structure is due to be complete by April next year.
The conference also heard that work is due to begin in January on the Icknield Port Loop, which is being developed by a joint venture between the Canal & River Trust, Birmingham council, Places for People and Urban Splash. James Lazarus, head of property development at the trust, said detailed consent had been secured for the first 202-home phase of the 1150 dwelling development and that work was due to begin after Christmas. He told the event that the site, which is sandwiched between the city centre and the upmarket suburb of Edgbaston, is one of the largest urban regeneration opportunities available in the UK.
Lazarus also said that the first phase of the plans to redevelop the trust’s Kingpin Industrial Park on the opposite side of Birmingham city centre, is due to be complete by Christmas. Four units in the 204,000 sq ft scheme in inner city Tyseley were due to be delivered by H20 Urban Partners, which has been funded by Ropemaker Properties, between now and March. There has been strong occupier interest accordingly to Lazarus, with one unit already having been pre-let in the scheme, the design of which was intended to improve vistas along the canal.
Beyond Birmingham, he said the trust had appointed Arcadis to masterplan the site of a 3.7-acre former crane foundry site, which sits within Wolverhampton’s designated Canalside Quarter South. He said that the trust was working with the council and the Homes and Communities Agency on the site, which is seen by Wolverhampton as one of its key regeneration opportunities.
He also added that the trust’s revamp of the Roundhouse in Birmingham, into a mix of uses including offices and cycle hire facilities, had started on site and was due to launch at the end of 2018.
Malcolm Lea, head of development and construction at Milligan Retail, told the event that its revamp of the Mailbox mixed use scheme on the edge of the city centre, had been complicated due to the contracts that had been in place when it took over the project. “The design and build contract passes risk across and the contractor takes risk on board but doesn’t mean that when things go wrong that’s the right place for that risk to be: we had to re-engage with the designers to get work done. Design and build is not the way to go in terms of a retail projects.”
The next event in the West Midlands will be the Birmingham Development Plans Conference on the 24th January 2018, with presentations from The Urban Growth Company, HS2, Birmingham Airport and Midlands Connect. Visit www.built-environment-networking.com for more details.