Insider Media Limited

The take-up of office space in Birmingham increased “significantly” in the third quarter of the year, according to DTZ. The property adviser’s Property Times Office Market Report said that during the three months to September 2010, 262,000 sq ft of space was let.

DTZ said that the number was boosted by the occupational purchase of 107,000 sq ft at Calthorpe House, pushing up quarterly take-up to its highest level since the third quarter of 2009.

However, the property adviser warned that conditions are set to remain difficult for landlords in 2011, when annual take-up is forecast to fall back.

City centre development The Cube was completed in the three-month period, making an additional 110,000 sq ft of space available. Half of the property is pre-let to the Highways Agency, while the remainder is being marketed.

David Tonks, head of office agency at DTZ in Birmingham, said: “Take-up in the city centre market during 2010 has already exceeded expectations and the best quality supply in the market continues to attract demand, as demonstrated by the recent sale of Calthorpe House to Binding Site. Since lease events are driving activity, demand continues to originate from a wide variety of sectors.

"Grade A availability fell back in Q3, but there is still upward pressure on poorer quality stock. Overall the market continues to be challenging and headline rents look set to remain unchanged over the next six months.”

Jeremy Payne, director in valuations at DTZ in Birmingham, said: “The pause in the investment market in the run up to the general election continued through the summer months. Values held up for prime grade A space but we have seen a widening gap between this and lower quality space where availability appears to be growing.”