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A Retrospective on Birmingham in 2017

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Birmingham submitted a stellar report card in 2017 and is looking set for an outstanding 2018 ahead.

2017 started out uncertain for Birmingham and for the whole of the UK. The country ended 2016 still reeling in shock from the results of the EU referendum, and predictions for the country’s economy and general future spelt doom and gloom. Birmingham, however, has met its challenges with remarkable grace and as 2017 came to a close, the city emerged as a rising star.

In 2017, Birmingham was “rising” in every sense of the word. According to Knight Frank, the number of active businesses in the city was up 13.5% on 2016 levels, three times UK’s national average growth rate. Total investment in the city reached £1.1 billion in the 12 months leading up to September 2017. To put this figure into perspective, consider that the total investment for the West Midlands was £2.4 billion over the same period, which meant that over 45% of this fortune was contributed by Birmingham alone. 30% of the £1.1 billion came from overseas investors, proving that Birmingham’s appeal as a centre for investment reaches beyond English shores.

The real estate sector is always a good mirror for the economy, so it should come as no surprise that ripple effects of the abovementioned investments could be easily observed in Birmingham’s property transactions. The largest office transaction of the year was the £265 million purchase of a number of office blocks at Brindleyplace by HSBC Alternative Investments as it completed the relocation of its headquarters from London to its Birmingham new home at Arena Central. And while the bank’s expensive move may be the most headline-grabbing one, it most certainly wasn’t the only company that has chosen to reduce operations in London in favour of Birmingham last year. HSBC’s move followed hot on the heels of Deutsche Bank, which relocated 500 employees from the capital city to Birmingham in 2014.

Credit for the ability to overcome development challenges has to be given to Birmingham’s Big City Plan, which city’s officials unveiled in 2011. Six years later, the ambitious plan was well and truly in motion, and it was finally starting to achieve what it set out to do – rejuvenate Birmingham’s city center in order to attract new businesses and residents. Areas identified for development in the Big City Plan, such as Snowhill, Paradise Circus, and Arena Central, have seen office spaces mushroom over the course of the year. On 2 Cornwall Street now stands the newly-branded, 110,000 sq ft Cornerblock, and One Colmore Square is now a gleaming 200,000 sq ft grade A office block.

Despite this steady increase, residential property prices in Birmingham remain affordable compared to London. Prices for new developments in central London currently range between £1,000 and £2,000 psf, compared to that for properties in central Birmingham, which command just £320 to £420 psf. The difference is especially significant when taking into account that as a business hub, Birmingham is fast becoming comparable to the capital. In other words, it has all the opportunities and infrastructure without the corresponding price hike.

Most of the bigger cities in the UK are currently facing a shortage in housing, and Birmingham is no different. According to the latest national population projections, the population of Birmingham is expected to rise by 171,000 to hit 1.3 million in 2039. This means that 4,461 new homes need to be built every year to meet demand. This offers plenty of investment opportunities for developers. Hong Kong-based Top Capital Group, for example, is currently in the midst of completing two luxury residential developments, The Axium and Arden Gate, both located in prime locations in Birmingham’s business and retail districts, near the brand new Grand Central / New Street Station. Upon completion, both properties will deliver 539 residential units joining the 3,500 currently in the development pipeline in Birmingham city centre.

Of course, a retrospective of Birmingham’s 2017 would not be complete without a mention of the HS2. With the high-speed rail station being planned for central Birmingham, the building of the train route is itself a vote of confidence from the government for Birmingham. The historic Curzon Street station is currently awaiting its transformation into a seven-platform HS2 terminal, complete with a 350-acre site around it that houses shops, offices, a hotel and 2,000 residential units. City officials are hoping that the Curzon Street transformation will mirror the success seen at New Street Station, which, in 2017, reopened as an impressive entry point into Birmingham with extensive retail spaces including British high-end department store John Lewis as an anchor tenant.

Strong infrastructures, good business, a burgeoning population, and improved connectivity – Birmingham couldn’t have expected more in 2017, and the developments of last year have put it in good stead for continued success in 2018 and beyond.