City Spotlight: Birmingham

Birmingham is a city that has seen a significant increase in investment over the last five years. As with the majority of the regions, the city is benefiting from London commercial – and residential – property prices reaching realms that prove unachievable for the majority of investors. In addition to the gross price, many experts have been quoted stating the ‘value-add’ opportunities just don’t exist in London like they once did. A factual example of such was the recent – and well discussed – purchase of the ‘CheeseGrater’ early this year. This purchase totalled £1.15billion and while the price was recording breaking, it also revealed one of lowest yields that the London commercial property market has seen, with a figure of 3.4%.

Yet this cannot be the only reason for increased expenditure in Birmingham, can it?

The revolution of HS2 is also thought to have had an impact on the increased investment levels. A recent example includes the Prime Minister signing off £1billion worth of investment into Birmingham’s Eastside district, the project is set to create new offices, 4,000 tram lines, 36,000 new jobs as well as generating an estimated £1.4billion for the local economy. Of course, investment breeds investment, meaning the increased level of infrastructure and accessibility is only going to attract even more interest to the area. Mark Finucane, The Regional Development Director at Together, stated how the local residential property market will naturally benefit along with commercial in tow.

While HS2 is proving to be a talking point around Birmingham and clearly having an impact on the increased activity, it is not due for full completion until 2033, yet shifts in investment have begun already… Peter Ferrari, CEO at Ashby Investments, stated the key reason for this is the increased level of both technology and connectivity in the region. The technological developments have meant increased transparency between businesses, resulting in more confidence, which again, boosts investment. The remaining point around the increased technology is Skype; Skype allows interactive meetings, making it is easier to liaise and work alongside co-workers or clients in London without actually being there, making it is easier for companies to be based outside of the Capital. A recent move which would demonstrate this fact is HSBC, who have moved out of their Canary Wharf offices and relocated themselves in central Birmingham.

So what caused £845million to be transacted in Birmingham in 2015? Which proved to be nearly double the previous five-year average…? Regardless of whether it is being spearheaded by the HS2 scheme or indeed in a different factor, it is showing positivity for the region for years to come!

Bradley Flatt, Real Estate, Foundation Recruitment

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