Buoyant year ahead for Birmingham office market

The Birmingham office market has kickstarted 2025 with a bang, following news from EY that they are set to relocate 1,200 staff into 70,000 sq ft offices at Three Chamberlain Square next year.

It represents a significant office deal for the city, and continues the positive office trends we monitored throughout 2024, which was an exceptional year of office take-up for Birmingham.

But what is driving this demand and what do occupiers want from their office space in Birmingham? Carole Taylor, Regional Managing Partner at property consultancy Vail Williams, explores.

2024 marked a turning point for the Birmingham office market, which saw take-up in the city exceed 843,000 sq ft, a 20% increase on 2023 figures.

Companies cemented their post-pandemic office decisions and by the end of Q3 2024, the number of office transactions totalled 71 – the highest take-up for that stage of the year since 2015, according to the Birmingham Office Market Forum.

Indeed, Q3 alone saw a record-breaking take-up of approximately 337,236 sq ft across 23 transactions, a staggering 156% increase on 2023 figures and the highest take-up per quarter recorded since the pandemic.

And whilst there were 12% fewer deals in 2024 (96), more space was actually let, showing a desire to lease more space once again, driven by the nationwide return to the workplace that we have seen which, for the most-part, remains on a hybrid basis to one extent of another.

What sectors are driving the Birmingham office market?

Education and Innovation Hub

A standout performer in 2024, the education sector accounted for 42% of total take-up in Birmingham.

High-profile deals included Aston University which leased 189,503 sq ft at 10 Woodcock Street, and the Global Banking School which expanded into 1 Brindleyplace, both of which reaffirm Birmingham’s appeal as a hub for education and innovation.

Evolution of Innovation Districts

Meanwhile, the Knowledge Quarter which focuses on R&D-driven engineering, advanced digital technologies and health tech research clustering, together with the Health Innovation Campus, have both taken off.

In 2023, Enterprise Wharf, Birmingham’s first truly SMART building completed, marking a major milestone for Bruntwood SciTech. The EPC A rated, 10 storey, 120,000 sq ft building was developed for innovative occupiers.

Together, these continue to attract science, technology, and healthcare firms, fostering collaboration and really do establish Birmingham as a tech and innovation hub and this represents a significant growth area for the city as we look ahead.

TMT and Professional Services

The TMT sector was in the driving seat of leasing activity in 2024, with several notable transactions.

Meanwhile, Birmingham’s Colmore Business District (CBD) remains a hotspot for legal and professional services, further strengthening the city’s position as a leading commercial centre.

Whilst transactions were more subdued in the professional and financial services sector in 2024, we expect to see more activity here this year, as the drive back into the workplace continues.

Indeed, with EY’s announcement in January that they will relocate to Three Chamberlain Square, this prediction is already coming to pass.

Serviced office market in Birmingham

The serviced office market in Birmingham has also thrived alongside more traditional office space.

There is still a lot of demand for short-term flexible leasing options, as hybrid work models remain in place for a lot of businesses, but sectors such as education have also leveraged its versatility for administrative and teaching purposes.

There is a range of flexible, high quality office space in Birmingham which is ready-to-occupy, including at Louisa Ryland House,  Cubo at 2 Chamberlain Square and  x+why at 103 Colmore Row which all combine central connectivity with modern flexible office amenities.

Buoyant year ahead for Birmingham office market

High-profile projects like Three Chamberlain Square (189,000 sq ft) and an extensive refurbishment at Multistory will introduce more Grade A office space in 2025.

A significant redevelopment project, Multistory will combine two buildings to create a destination for work, retail, and leisure with 75,000 sq ft of Grade A workspace and 15,000 sq ft of amenity space due to market in Q1.

With £45.00 psf achieved at 103 Colmore Row, prime rents in Birmingham are now between £40.00-£45.00 per sq ft for premium office space in the city.

Features like energy efficiency, wellness spaces, and cutting-edge facilities are now on the essential list for occupiers.

The emphasis for landlords, therefore, has to be delivery of low-carbon, sustainable designs aligned with Birmingham’s net-zero goals, and new developments will need to meet this design premium if they are to attract quality occupiers such as more blue-chip organisations.

The Birmingham office market is poised for sustained growth in 2025, driven by a focus on office quality, lease flexibility, and sustainability credentials.

With an expanding base of diverse occupiers and investment in innovation districts, the city will cement its role as a competitive and resilient destination for businesses.

As the market evolves, both traditional and serviced office spaces will remain pivotal in meeting the demands of modern occupiers.

Whether you’re an occupier seeking the perfect new office in Birmingham, a landlord wishing to let your office asset, or you would like support with the project management of an office refurbishment project Vail Williams’ Birmingham property advisers can help.

With deep local market knowledge and a proven track record, our agents and surveyors can guide you through every step to achieve your office property goals. Get in touch for more information.