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A City in Good Standing

Dec 19, 2017 | News | 0 comments

Blessed with strong fundamentals for growth, Birmingham is poised to become one of UK’s property investment hotspot.

Seven years after Birmingham’s Big City Plan was unveiled in 2010, the city has seen major infrastructure investments and the development of iconic commercial and mixed-use projects. Despite this, the city centre has seen very little new residential supply since the financial crisis, and this lack of supply and heightened demand is key to why the city is currently so attractive for investors and developers alike. There are simply not enough homes being built for the rapidly growing population, so those who get in now – whether they are developers contributing to future supply with plans for new-build units, or buy-to-let investors snapping up properties in anticipation of increasing demand from Birmingham’s new and existing residents – are likely to profit from it in the near future.

That said, Birmingham’s performance isn’t unchallenged. For investors looking outside of London, Manchester has constantly come up in the last two years as a strong contender, even attaining the reputation of being the northern powerhouse. However, the city’s property market may now be approaching a plateau, with some areas showing signs of oversupply and property prices approaching dangerously heated levels. Some developments are even selling for as high as £500 psf. In contrast, Birmingham is only just embarking on its journey of growth, with average prices in the £350-400 psf.

In this year’s Emerging Trends in Real Estate Europe, a joint survey conducted by PwC and the Urban Land Institute, Birmingham emerged as the highest performing UK city. Besides citing developments in infrastructure as a factor, PwC also acknowledged the city’s healthy office take-up exceeding 500,000 sq ft in the first half of 2016. In fact, PwC itself will be relocating its Birmingham office to a new one at One Chamberlain Square once the building is completed in 2019. In the residential sector, interest has been picking up steadily since 2013, according to research by Knight Frank. The number of transactions recorded each month rose to an average of 1,162 last year, significantly higher than the 714 recorded in 2009. These numbers show a very active market for investors looking at exiting or reinvesting at medium term.

These more than favourable fundamentals haven’t gone unnoticed even outside of the UK. Many overseas developers have already expressed interest in Birmingham, and have claimed their respective spots in prime locations around the city centre. Top Capital Group, a developer hailing from Hong Kong, has The Axium and Arden Gate, two upcoming luxury residential developments both within walking distance from the newly renovated New Street Station. The former will be delivering 304 one- and two-bedroom apartments, and the latter 225 one-, two-bedroom and duplex apartments. Both are high-end residential properties targeted at professionals working in Birmingham’s city centre.

The Axium and Arden Gate are not Top Capital Group’s first ventures into Birmingham. Over the past few years, the developer has successfully delivered two developments targeting different segments of the market. The Franklin comprises 79 modern apartments situated in close proximity to Birmingham University aimed at independent young professionals and families. The Green is a cluster of 11 detached and semi-detached family homes perfect for local families looking for a greener, tighter community close to the city, located in the suburb of Acocks Green, 10 minutes from the city centre.