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

Carole Taylor, regional managing partner (Midlands and North) at Birmingham property consultancy Vail Williams, says the positive office trends monitored throughout 2024, which was an exceptional year for office take-up in Birmingham, are continuing. She added:

“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."

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

“Prime rents in Birmingham are now between £40-£45 per sq ft for premium office space in the city and features like energy efficiency, wellness spaces, and cutting-edge facilities are now on the essential list for occupiers.”

Carole, who has more than 30 years’ property experience across the Midlands, said 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 trade body the Birmingham Office Market Forum.

Indeed, Q3 alone saw a record-breaking take-up of approximately 337,236 sq ft across 23 transactions, a 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 mostly remains on a hybrid basis.

Carole said this demand was being driven by a number of sectors, including education, innovation, technology, media and telecommunications (TMT), professional services and the serviced office market.

A standout performer in 2024, the education sector accounted for 42% of total take-up in Birmingham, including one university deal for 189,503 sq ft, which helped reaffirm the city’s appeal as a hub for education and innovation.

Innovation districts such as the Knowledge Quarter, Health Innovation Campus and Enterprise Wharf, denoted significant growth and helped Birmingham to continue to attract science, technology, and healthcare firms and establish the city as a tech and innovation hub.

The TMT sector was in the driving seat of leasing activity in 2024, with several notable transactions, and Colmore Business District remains a hotspot for legal and professional services, further strengthening the city’s position as a leading commercial centre.

Carole added: “The serviced office market in Birmingham also thrived alongside more traditional office space in 2024, with ongoing demand for short-term flexible leasing options.

“This is down to hybrid work models remaining in place for a lot of businesses, but sectors such as education have also leveraged its versatility for administrative and teaching purposes, as we saw across several transactions last year."

“We are expecting even more activity in 2025 as the drive back into the workplace continues, which bodes well for the regional office market and the businesses based here.”

Vail Williams has been based in the Midlands for nearly 15 years, during which time its team in Birmingham has tripled in size, including the recent appointment of property agent, Joshua Laurence from Macguire Jackson.

The firm also has a presence in Leeds, with a client base which extends across the North – from Birmingham to Nottingham, on up to Leeds and Newcastle and back down to Manchester and Stoke-on-Trent.

Vail Williams’ full-service property advice includes commercial agency, investment and development advice, building consultancy, property valuation, planning, lease advisory, property asset management, business rates and occupier consultancy.