Move over, Manchester – Midlands motor Birmingham is setting the pace
UK’s second city has been quietly casting off stereotypes from the recent past to become a hotspot for business, says estate agent.
Move over, Manchester. Never mind the northern powerhouse. Birmingham is Britain’s business hotspot, according to the estate agent Knight Frank.
The UK’s second city, with a population of more than a million, has cast off its image of motorways, industrial decline and urban unrest to become a budding centre for financial services, new technology and architectural showpieces, Knight Frank said in a report.
The city’s renaissance is being fuelled by the arrival of big banks, professional services firms and the planned building of the HS2 rail link to London alongside the success of Jaguar Land Rover and other manufacturers.
Mirroring this development, pints of mild and uninspiring nightlife have given way to glitzy bars, Michelin-starred restaurants and upmarket shops. John Lewis, whose former managing director Andy Street is now the Tory candidate for Birmingham’s mayor, opened a 170,000 sq ft store last year.
Deutsche Bank opened a Birmingham office 10 years ago and now employs 1,200 people, including corporate bankers and wealth managers. Next year HSBC will return its retail bank’s head office to the founding city of Midland Bank, which HSBC bought in 1992. The move will create 1,200 jobs. The closure of regional tax offices leading to job losses will be Birmingham’s gain in 2019 when HM Revenue & Customs opens a regional hub employing at least 3,000 people.
HSBC and HMRC are moving into new buildings in central Birmingham, whose Victorian grandeur gave way to grim postwar office blocks during the 70s and 80s. HSBC will occupy a building at the Arena Central development in the convention quarter overlooking Broad Street, where city centre living took off in the late 90s.
Ashley Hudson, Knight Frank’s head of Birmingham commercial property, said even before HS2 is built Birmingham is benefiting from being distinct from but relatively close to London, which is 120 miles away. Last year 6,016 people moved from London to Birmingham, more than to any other UK city.
But he said Birmingham had its own appeal and that graduates from its universities were increasingly staying on, attracted by the quality of life, lower living costs and career opportunities. “I arrived in Birmingham 20 years ago and it wasn’t a particularly brilliant place to be and a lot of people would agree with that.
“At one time in the office district there wasn’t really anything to do after work, but now there are bars opening all the time and they are full. There’s never been a better time to work in property in Birmingham.”
Despite being almost twice the size of Manchester, Birmingham has played second fiddle in cultural and business terms to its rival former industrial city. Just as the Smiths and the Stone Roses had more credibility than Duran Duran and ELO, so the last government favoured Manchester as a model for urban renewal, putting it at the centre of the northern powerhouse project.
Under Theresa May that has changed, and she now refers to Birmingham as the Midlands motor as she seeks to build appeal across the country.
The city’s growing appeal is reflected in its property market, Knight Frank said. Takeup of office space this year of 596,500 sq ft is 18% higher than the long-term trend, and in the year to the end of June, Birmingham was one of the 10 best-performing European cities for capital growth. Since the start of 2014, more than 425,000 sq ft of office space has moved from London to Birmingham, with a potential further 1m sq ft in the pipeline, Knight Frank said.
Trowers & Hamlins, a London law firm, opened an office in Birmingham with a handful of people five years ago, but the branch now employs 100. Chris Plumley, a property law partner at Trowers who has worked in Birmingham for almost 20 years, said the office expanded as the city spawned bigger and bolder regeneration projects. “Birmingham has always had a pretty vibrant market, but what seems to have happened is a move away from parochialism,” he said. “The business community has developed a confidence that is more fitting for the size of the city.”
Birmingham’s renaissance has further to go, Knight Frank’s Hudson argues. He said the growing financial sector and Birmingham’s proximity to London give it the potential to become a technology centre as tech firms set up to serve banks and jobs in manufacturing are performed by robots.
- Since the start of 2014, more than 425,000 sq ft of office space has moved from London to Birmingham, with a potential further 1m sq ft in the pipeline.