NEWS
BREEAM ‘EXCELLENT’ OFFICE SPACE WILL BE HOT PROPERTY, AS SPECULATIVE DEVELOPMENT GOES ON ICE
June 2009
The limited number of BREEAM ‘Excellent’ office buildings in Birmingham are set to become the hottest property around, say Midlands property development partners Folkes Holdings and Trigram Properties.
According to the partnership duo, which is bringing forward Langley Point - the flagship 44,500 ft BREEAM ‘Excellent’ office scheme in Birmingham city centre - the funding freeze is putting speculative development on hold potentially causing a shortage of BREEAM ‘Excellent’ properties when the occupier market returns.
The shortage will most affect public sector departments, higher profile institutions and PLCs seeking new space, as these occupiers are increasingly pressured to take the lead on environmental issues resulting in a natural preference for BREEAM ‘Excellent’ buildings, explained Andrew Parker, property director of Folkes Holdings.
“Currently, there is just 367,500 sq ft of new build BREEAM ‘Excellent’ office space on the market in Birmingham. In normal market conditions, this represents less than a year’s take-up.
”This limited supply suggests such buildings will become increasingly sought after by prospective occupiers and therefore should be able to command higher rental levels when the market restarts.
“Whilst at the moment enquiries from occupiers are still being received, clearly the pace has slowed considerably in the current economic climate and it is still very much a tenants market. As to be expected, the amount of space taken in the first six months of 2009 is significantly down on last year.”
However, whilst Birmingham has 1.28m sq ft of Grade A office space currently available, presently there are just four new BREEAM excellent buildings being completed in the city.
“This will eventually lead to dearth of environmentally up-to-date office units of the type that are attractive to occupiers such as The Highways Agency who would only consider BREEAM ‘Excellent’ buildings.”
For Trigram’s co-director Bill Houle, the message to companies anticipating a move over the next three to four years is to act now or risk missing out.
He said: “When the market restarts, BREEAM ‘Excellent’ buildings will lead the pack on higher rental levels justified not only by the quality of the buildings, but by reduced operating costs. Now is the time for a good deal because when this limited office space is gone, it is unlikely comparable offerings will be found for a significant period.”
This is at a time when a latest survey* by commercial property agents Drivers Jonas shows the current main driver for occupier decisions is cost.
Analysis shows that Langley Point as a BREEAM ‘Excellent’ building represents outstandingly good value against other city centre properties of similar specification, with potential savings up to £500,000 per annum on total running costs, which equates to £2.5million over a five-year lease.
Much of this has to do with lower service charge, lower rating costs and lower rental costs in comparison with others.
An exemplar of energy efficiency and green design, Langley Point was constructed at 20 per cent extra cost, with the specific intent of keeping running costs for the occupier to a minimum.
Although particularly suitable for single occupiers who want the control and security that comes with their own front door, the building is designed to be flexible and each floor can be divided to be let either on a whole or part-floor basis.
At only £23.50 per sq ft, Langley Point is available at one of the most competitive rents in the Birmingham. It is also the only BREEAM ‘Excellent’ building available under 100,000 sq ft. With incredible views over the city, light streaming in from floor to ceiling windows, it is a building which promises to be an inspirational place to work.
Situated in the prominent Park Central development at the Bath Row junction with Holloway Head, Langley Point comprises ground and four upper floors. The building enjoys unrivalled access to the city’s transport links, being just a few minutes walk from Five Ways and New Street Station; the Bullring; the Mailbox; served by 9 major bus routes, as well as affording rapid access to national motorway networks the A38 and M6.