Sam Metcalf
Editor of Midlands Business Insider
In Focus: Stuck in the middle
Experts from DTZ painted a very interesting picture of the local commercial property market at an event in Birmingham this week. Supply and demand is going to be an issue in the city centre office market apparently as steady take-up is filling available space and little else is being developed.
Banks meanwhile are too busy dealing with distressed debt to consider funding development - unless it's sure fire hit with a substantial pre-let. But there is better news on the investment front with interest spreading out from London to provincial cities.
It is against this backdrop that the Greater Birmingham Local Enterprise Partnership (LEP) has decided to place its enterprise zone in the city centre.
I've said in the past that I'm not convinced about this plan. The problems in Birmingham city centre might be seen as a cycle in the property market. I'm sure most observers are of the opinion that market conditions will improve. Compare this to the deep seated problems in other parts of the city and there is an argument that an enterprise zone which offers incentives to occupiers could be a real catalyst for economic growth and job creation in areas such as Washwood Heath or Shard End.
The argument in favour of a city centre enterprise zone is that this location offers the best chance of bringing in inward investment and fits well with the city’s revised Big City Plan masterplan.
I have another concern and that is that businesses outside of the zone will prefer to be in it and this type of 'churn' will be the real basis of activity rather than genuine inward investment. This sort of displacement was seen in the retail sector in Birmingham when the Bullring opened. Streets elsewhere in the city centre saw stores re-locating to the bright, shiny new shopping centre and some of them still haven't recovered.
I accept that the fiscal incentives won't be great enough to persuade large businesses to relocate to the zone and nor would professional services firms, say, want to move from their traditional locations. But for medium-sized businesses planning to move anyway, choosing the enterprise zone rather than an area just beyond its limits would be a no-brainer.
More generally, I still feel more needs to be done to develop other areas of the city beyond the core - whether that be through better transport links, utilising public sector land to stimulate development via the use of tax increment financing (TIF) or JESSICA funding or trying to stimulate an area via incentives for independent retailers and leisure operators.
My main fear is that the gameplan for Birmingham is to stimulate the city centre in the hope that others areas will benefit from the trickle down effect. I think wealth created in the city centre stays in the city centre or benefits the skilled workers who live in the wealthier outer suburbs and not those people living in the areas in between where help is most needed.
Urgent intervention is needed to give such areas a leg up. There seem to be plenty of ideas knocking around regarding the future of Birmingham but there still seems to be a tendency to think that the city stops at the ring road.
Any Comments?
Email Us Your CommentsRecent Posts
About Sam
Sam Metcalf is assistant editor of Midlands Business Insider, and has worked at the magazine for the last five years. Based in Nottingham he writes on commercial property, corporate finance, law, and international trade.
Services
Dealmakers Services Directory
Directory Find an advisor to help you buy, sell or invest
Property Services Directory
Find an advisor across property services
Commercial Property Finder
Full commercial property listings in the Midlands
Guides
Midlands City View
The news, features and analysis that matter for your city
International Trade
Our guide provides expert analysis on a range of trade destinations
42 under 42 Members
The latest class of the Midlands brightest young business people
- Contact us
- Midlands
- North West
- South West
- Wales
- Yorkshire
- Other regions
- 0121 232 0980
- 0161 907 9711
- 0117 906 5900
- 02920 434500
- 0113 220 4410
- 0161 907 9718
- Insider regions
- Central & East
- Ireland
- Midlands
- North East
- North West
- South East
- South West
- Wales
- Yorkshire