Paradise deals behind late surge in Midlands office lettings
Birmingham was home to two of the top-five office lettings outside London in the last financial quarter, as the city recorded a strong finish to 2025.
But according to research by Avison Young, detailing office market activity in the top cities outside the capital, locations across the country grappled with a shortfall of Grade A new-build space – with refurbishments making up more than half of the 2026 office development pipeline.
Birmingham’s office take-up totalled 335,625 sq ft in the final quarter of the year, the strongest quarter of 2025/26, pushing annual take-up in line with the five-year average.
The biggest deals in the city both revolved around the city’s soaring Paradise district, with Ernst and Young’s deal for three floors at 3 Chamberlain Square the largest of any outside the capital in Q4 at 93,780 sq ft.
Deloitte’s deal for two floors at Centenary Way was the fourth largest.
Prime rents in the city surged by 7.5% in 2025 to £46 per square foot, while vacancy fell 160 basis points to 11.3%, reflecting strong occupier sentiment as take-up outweighed the release of space, according to Mark Robinson, head of office agency, Birmingham at Avison Young.
“Birmingham’s performance in Q4 underscores the depth of demand for high‑quality workspace, even in a challenging environment,” he said.
“The city continues to attract major occupiers seeking best‑in‑class offices, as demonstrated by EY signing for 94,000 sq ft at Three Chamberlain Square to relocate and increase its office footprint from nearby Colmore Square.
“With vacancy easing and prime rents holding firm, we expect 2026 to build on this momentum as organisations invest in space that supports talent, culture, and long‑term business growth.”
Strong occupier demand for best-in-class workspace continued to push rents higher in 2025, with Birmingham, Bristol and Leeds all setting new rental records in 2025.
Q4 2025 investment volumes reached £227m, extending the trend of subdued activity across the big nine markets throughout the year, bringing the total to £1.1bn, which is 20% lower than 2024 and significantly below the 10-year annual average of £2.4bn.
Following a subdued year for development starts in 2025, the next three years are forecast to deliver 840,000 sq ft of new space per annum across the big nine, below the annual historic average of 2.5m sq ft, with refurbishments expected to help plug the gap left by slowing new build starts.
