WEST MIDLANDS COMMERICAL PROPERTY UPDATE

Market Overview News

Over the past 6 to 12 months, it’s become clear that Birmingham’s commercial property market is not slowing so much as recalibrating. From my perspective on the ground at FHP Birmingham, occupiers and investors are still active, but decision making is more deliberate and far more focused on quality than it was even a couple of years ago.

In the office market, we are continuing to see good levels of enquiry enquiries for well-located, high-quality space. We’ve recently been involved in transactions where occupiers have moved decisively once the right building became available, particularly where space is already fitted, energy efficient and capable of supporting hybrid working. At the same time, we are also advising landlords of older office stock that expectations around rental levels and incentives need to shift unless meaningful investment is made into the building.

What we’re seeing isn’t a lack of demand for offices. It’s a lack of tolerance for compromised space. When a building works, occupiers are prepared to act. When it doesn’t, it can sit for a long time.

Industrial and logistics demand across Birmingham and the wider West Midlands remains resilient, particularly for smaller and mid-sized units in established locations. Much of the activity we are seeing is driven by existing businesses looking to relocate or expand rather than speculative growth. In several cases, occupiers are competing for the same limited stock, especially where yards, power supply and access are right. Conversely, older estates with tight yards or functional limitations are seeing far more scrutiny than they would have done previously.

Retail continues to be very location specific. In stronger pitches and convenience-led locations, we are still completing deals, often with operators focused on affordability and flexibility rather than long-term commitments. Elsewhere, we are having more honest conversations with owners about alternative uses, particularly where retail demand is clearly no longer sustainable.

Hospitality and leisure is another area where sentiment has improved. We are seeing renewed investor interest in Birmingham-backed assets, particularly where trading performance is strong and the underlying fundamentals make sense. Confidence isn’t back to previous peaks, but it is noticeably stronger than it was 12 months ago.

From an investment perspective, pricing realism has been key. Where vendors are prepared to reflect current market conditions, deals are happening. We are also seeing lenders return to the market, although underwriting remains cautious and focused on income quality and risk.

Looking ahead, Birmingham remains a fundamentally strong market, but it is no longer forgiving. Buildings need to earn their place in the market, whether through specification, location or adaptability. Those that do continue to perform well. Those that don’t are increasingly forcing difficult, but necessary, decisions.

For further information on the Birmingham commercial property market and how FHP can help you contact Caine Gilchrist on 07538 606 880 / caine.gilchrist@fhp.co.uk.