Offices to let

Offices to let

Offices to let

By Alan Clawley.

The cream of commercial property in Birmingham, as in other cities, is known as ‘Grade A’ office space. It’s the best that money can buy in the most prestigious location. It’s ideally housed in a building that is bigger, newer or in some way more prominent than its neighbours and be capable of accommodating the headquarters of a world-class company.

Existing buildings can be successfully refurbished to Grade A standard; the 18-storey office block at 54 Hagley Road designed originally by John Madin and opened in 1978 has been refurbished to Grade A and is marketed as one of the best office blocks in Birmingham. But, according to research done by the British Council for Offices there is no international standard for a Grade A office to help international occupiers choose in which city they should sign up for leases. The BDC also concluded that digital technology and non-hierarchical ways of organizing offices will result in less office space being needed.

Birmingham not only has to compete with every other UK city for tenants of Grade A offices, but with every other city in the world. At the same time the current economic climate is forcing companies to cut spending on office space. The developers of the proposed ‘Beorma’ scheme in Digbeth recently announced to the distress of the planners that they would not be building the office tower because of lack of demand. In their desperation the council thought of using compulsory purchase orders to move the scheme on. The 35–storey British Land tower proposed to replace the NatWest Tower in Colmore Row is also on hold.

An obvious indicator of the level of demand is the amount of office space of any kind lying vacant. Some of it is obvious from the plethora of ‘To Let’ signs but some, such as ‘Five Ways Tower’ in Frederick Road, do not even advertise their emptiness. This elegant red brick and black glass 23-storey tower was designed to a very high standard by the Crown Architects and opened in 1979. It provided 100,000 square feet (9,000 square metres) of floor space and was occupied by government offices for the first 10 years but has since stood empty. It stands in the prestigious business district around Five Ways and Hagley Road.

Because City planners and politicians would die to have more new Grade A offices in the city centre they pull out all the stops to find sites and give permission for them, often at the expense of other uses. Birmingham’s planners have long earmarked Paradise Circus, once it has been cleared of existing buildings, for new Grade A offices even though they are unlikely to be ready to occupy for many years. Council officers are not the best people to predict market trends.

Former planning chief Clive Dutton confidently stated in the Birmingham Post on 3 November 2007, just before the property crash, that “…[there is] an insatiable appetite among private sector developers to buy sites in the city centre. Please trust me that we know what we are doing”. Mr Dutton didn’t stay to find out that he was wrong and soon after went to work for a London borough on its Olympic Legacy.

Why do the planners hang on to this policy when commonsense tells us that there is no huge demand for Grade A office space? How can they be sure that Paradise Circus will not stand empty for many years and produce no return either for the developer or the city council?

In their eagerness to redevelop Paradise Circus the planners show that they are more optimistic than the hard-nosed developers perhaps because they can let the developer take the financial gamble. But council planners should adopt a wider view on our behalf and ask whether there is a need for new offices to be planned whilst existing office buildings stand empty. That would at least help the council’s policy of reducing CO2 emissions.

Five Ways Tower

Five Ways Tower

Unfortunately, the council is so heavily committed to Argent at Paradise Circus that they dismiss any other option out of hand. I asked Andrew Round why it would not be preferable for Five Ways Tower to be brought back into use for Grade A offices, but he told me that it ‘did not provide the quality of spaces nor is it in a location that would be attractive to the companies that would look to locate at Paradise Circus, this would be the case should the building be refurbished’.

But a website forwarded to me by the government contradicted this. The states, ‘Basic refurbishment could lead to a very comfortable office building’. ‘The City Council are enthusiastic about plans to reuse the building and the underground car parking arrangements and wish to see the building brought back into life after many years of abandonment’. ‘There is much local interest in the building and in a peculiar way the people living in the area seem to love it.’

In the meantime I am hoping that Mr Rounds can tell me the names of the top international companies that have had the foresight and courage to put their names down for a lease on an office block in Paradise Circus that is not likely to be ready for occupation before 2020.