The price of office space to let in Birmingham has fallen dramatically, and the average price of a desk in one of the serviced offices in the city has dropped from £264 a month in 2010 to its current rate of £190 a month.
Based on the average year on year prices for the period January-September, which has been recorded by the largest independent online search and consultancy service in the UK, officebroker.com, businesses entering the serviced offices during that 9 month period paid an average of £74 a month less than they did last year at the same time.
The initial knee jerk reactions have been assumptions that the lower prices are a direct result that providers are having a price led competition, but the office search specialist has released data that seems to suggest otherwise.
According to the City Focus: Birmingham Q3 2011, a quarterly publication which tracks the trends and changes across the City’s serviced office market, the lower prices could have been the result of higher volume deals being completed by local office providers.
While in 2010 businesses entering flexible office space were presented as having a requirement of just over 3 workstations each, in 2011 the average amount of office space required had more than doubled to nearly 7 workstations.
“Larger occupiers will result in lower rates being negotiated with providers” explained a spokesperson for officebroker.com.
“The larger businesses with larger requirements, which were largely absent in 2010, would appear to have had an impact on the pricing levels being recorded across the city centre. And while the individual number of firms moving into serviced space has fallen, the amount of physical space taken has increased by 85%.”
Looking forward to the remainder of 2011, the period of September – December historically delivers an upturn in both enquiries and the number of businesses moving into Birmingham’s serviced offices after a summer slowdown.
Shown in the year-on-year data contained within the report, this potential increase could lead to higher prices as supply begins to come under greater pressure.