With HS2 and other transport improvements, a boom in office building is predicted for England’s second city, writes Merlin Fulcher
More from: HS2 primes Birmingham for office big bang
The UK’s second largest city, Birmingham is bracing itself for an ‘explosion of speculation’ in commercial offices when the government’s proposed £33 billion HS2 link makes it onto the statute books later this year.
The 13-year construction project – announced in the Queen’s Speech as a hybrid Bill for this Parliament earlier this month – is expected to bring a £1 billion-a-year boost to the Midlands city and ratchet up demand for new employment space.
Once complete, the scheme will nearly halve journey times to the capital. As Labour peer, former transport secretary and HS2 champion Andrew Adonis recently told the British Council for Offices: ‘I’ve travelled the world and not yet found a city that says they would be better off without High Speed Rail.
‘[More importantly] gross value added is directly correlated to proximity to London.’
The early ripples are already being seen. Dav Bansal, of Birmingham-based Glenn Howells Architects, says: ‘HS2 is giving private and public sector developers the confidence that we should start thinking sooner rather than later and start to create the right product for the market.’
The city’s former regeneration guru, Philip Singleton, agrees. He says: ‘As soon as all the guns are fired finally on HS2 we will see an explosion of speculation. There will be a concern [this speculation will back] purely office buildings. But it’s about growth and density and there’s a massive issue of unemployment in Birmingham.’
According to Bansal, major schemes like Glenn Howells’ £450 million speculative office-led overhaul of Paradise Circus show a city-wide move to ‘pump prime demand so we can have the next Deutsche Bank here or the next large institute or Google regional office.’
Given outline planning in December, the enormous 170,000m² masterplan also includes a hotel, a theatre, retail and 10 office plots. If all goes to plan, the projects will be awarded through architectural design competitions, with the first two set to launch this year.
Controversially, Paradise Circus will sweep away John Madin’s Brutalist Central Library – with its contents finding a new home in Mecanoo’s £188 million library building for Birmingham City Council in nearby Centenary Square – alongside a significant chunk of the city’s much-maligned ‘concrete collar’ inner ring road.
Glenn Howells has won outline planning for Argent’s mixed-use office and retail redevelopment of Paradise Circus. Design contests are planned for (A) terraced building of max 18 storeys, (B) eleven storey block with ‘set back’, (C) two-floor pavilion in public square, (D) seven-storey block enclosing square, (E) eight-floor block featuring colonnade, (F) max seven-storey building, (G) block stepping from 13 to 11 floors and a 22-storey hotel, (H) block of up to eigth stories and (I) building to 10 floors. Glenn Howells is expected to design one plot
David Partridge, joint chief executive of Paradise Circus developer Argent, says: ‘In Birmingham there is literally no [commercial offices] supply and what is there, is going to get soaked up in the next few years.
‘Assuming the economy doesn’t crash again there will be demand and any early movers will be able to take the opportunity.’
The upbeat prediction comes after property experts at MIPIM – where Birmingham City Council courted Chinese and Middle Eastern sovereign wealth fund hoping to win up to £1 billion investment – projected that increasingly high land prices in London would see a surge of overseas and domestic investment in higher-yielding developments outside the capital.
It also defies a recent National Audit Office report warning that the regional economic benefits of the rail line – costing £16.3 billion between London and Birmingham – had yet to be proven.
Commercial property specialists believe the city’s strong links to a regional base and comparatively cheap labour have made it an increasingly attractive destination for employers.
Birmingham’s recently launched enterprise zone – the second largest in the country – will also add a raft of incentives such as rates relief and simplified planning to the mix and is expected to herald £2.8 billion-worth of growth annually and create 40,000 new jobs. The zone’s first £125 million funding tranche alone will see up to £80 million spent on infrastructure and landscaping for Paradise Circus.
Ultimately the investor market for development projects will pick up very soon
Ben Kelly, a commercial expert at Jones Lang LaSalle in Birmingham, reports an ‘extremely strong’ investor market for up and built projects fuelled by a shortage of Grade A offices. He says: ‘Ultimately the investor market for development projects will pick up very soon, possibly within the next three months.’
Another key driver for regeneration has been Alejandro Zaera-Polo Architecture’s £600 million New Street station overhaul (formerly a Foreign Office Architects’ project), which, according to Kelly, has fundamentally changed overseas investors’ initial impressions of the city and boosted demand.
Bansal suggests the stainless steel landmark – which completed its first phase by opening half of its new concourse last month – had dissolved a >> centre ‘stumbling block’ and was ‘immediately opening up’ opportunities at Paradise Circus, Snow Hill and Victoria Square.
‘We are finding a lot of developments are happening around major transport hubs,’ says Bansal, describing Birmingham’s Eastside regeneration district next to the proposed HS2 terminal and home to a £8 million new urban park by Patel Taylor (AJ 28.02.13) as a key area for growth in student housing.
He says: ‘A lot of universities have relocated into the city and you see a real concentration of domestic and international students. We’ve got to reflect that by creating fantastic living environments for them.’
Key schemes in Birmingham’s Eastside regeneration zone: (1) proposed High Speed Two terminal by Arup (due 2026), (2) pHp Architects’ La Tour Hotel (completed 2012), (3) Eastside City Park by Patel Taylor Architects (completed 2012), (4) Exchange Square by Glenn Howells Architects (outline planning), (5) Associated Architects’ Birmingham City University phase one (complete 2013) and (6) phase two (due 2015) (7) Glenn Howells’ Eastside Locks (due 2015)
Not everyone, however, has found the development landscape as promising. Ken Shuttleworth, of developer-friendly outfit Make, recently decided to close the booming practice’s Birmingham office, blaming a ‘depressed economic climate’.
And – unlike London – housing in Birmingham city centre has struggled throughout the economic downturn and prospects for the residential market look bleak.
There is absolutely no new build private residential in the city centre
Bob Ghosh, of emerging practice K4 Architects, says: ‘As it stands there is absolutely no new build private residential in the city centre. It’s partly to do with land values and funding. No doubt it has had a profound effect on a lot of practices.’
Michael Brough, head of residential at Jones Lang LaSalle in Birmingham, blames Birmingham’s lack of an owner-occupier market – caused in part by the unavailability of mortgage finance – for the lack of new housing.
He also cites the city’s easily accessible leafy suburbs as a reason why families were unlikely to live in the city centre and pointed to the 100 unsold flats in Make’s 135-unit, two year-old Cube development as a key indicator.
Council plans to release 10,000 new homes on green belt land have meanwhile been described by Nick Corbett of Birmingham-based Transforming Cities as a key ‘threat’ to brownfield-first development.
Others round on Birmingham City Council’ three-year-old Big City Plan, arguing the regeneration framework – predicting a 25 per cent growth of the city core fuelled by an office-led development boom – needs a finer-grain approach with greater political backing and support for social enterprises.
RIBA regional director Matthew Dobson says: ‘You almost need a reconfiguration of the plan itself to recognise the more suburban and routine stuff – the work the majority of members are doing day to day.’
Gavin Orton, of Bryant Priest Newman, cites a range of smaller regeneration projects, including an MOT test training centre for disadvantaged youths, which had taken place outside the grand vision.
He says: ‘[The Big City Plan] needs to be regularly assessed, analysed and if required, revised so that it remains relevant and responsive to the needs of Birmingham.’
Corbett reckons the Big City Plan could receive ‘a shot in the arm’ by engaging more widely. He says: ‘There are existing communities, small businesses and social enterprises in the plan’s area which can deliver its ambitions in a very different way, but at the moment it has been focused on big developers and finance.’
Ghosh adds that the departure of the Big City Plan ‘godfathers’ Singleton and Clive Dutton in 2009 made it ‘difficult to convince the politicians and planning committee’ to support his practice’s high-rise Central Fire Station redevelopment.
The £31 million scheme, first unveiled in 2011, eventually won planning in a scaled-down form at the start of this year.
The council is also accused of ‘dragging its heels’ in delivering its new development plan, which is the next stage of detail after the Big City Plan framework launched in 2010.
Commenting on the development plan, which is not expected to materialise until late 2014 at the earliest, Louise Brooke-Smith of Brooke Smith Planning consultants says: ‘This is behind many other plans and the uncertainty in the city is not a good thing.’
Commenting on the concerns, Andrew Round – Birmingham City Council’s city centre development planning and regeneration manager – says the Big City Plan is likely to be refreshed in the next 12 to 18 months. He acknowledges concerns that finer-grain development needs greater emphasis and says the update, likely to be a supplementary document, will focus on delivery. He adds that masterplans for Birmingham’s Snow Hill and Southern Gateway regeneration districts are due in the near future.
Comment: Nick Corbett, founder of Transforming Cities
The Big City Plan continues to attract investment into Birmingham’s city centre. But some inner-city neighbourhoods have stubbornly resisted regeneration. Procrastination over the relocation of the council-owned wholesale market has delayed extension of the city centre into Highgate. It remains a slaughter quarter and the smell of meat processing repels the creative industries that would otherwise locate there.
Apart from the state of the economy, other threats to delivery of the Big City Plan include the council’s proposal to release the city’s green belt for 10,000 homes, which would end using brownfield first. There is growing pressure to invest in Birmingham’s local centres, of which there are more than 70. But officers in the council’s estates department don’t always agree with their colleagues in planning and regeneration.
To deliver the Big City Plan, the council could amalgamate its land and property into a private company. Such a company could borrow money at a preferential rate to pay for delivery and the council could borrow money against its share in the company.
The council’s estate’s department, however, is pursuing a different approach. They are selling off council land and property. In the current market, this does not represent a good return for the public purse.
A criticism of the Big City Plan has been that it talks the language of developers, not existing residential communities; and that new ways of working are needed to enable local people to participate in shaping their city.
Community groups have produced business plans to take on redundant council-owned premises within the Big City Plan area, but in the past their proposals have been met with resistance from the council’s estates department, whose officers maintain unrealistic expectations for market rents. Within the Big City Plan area some council-owned premises have been empty for over five years, but the estates department still resists asset transfer to worthwhile social enterprises. Could the time have come for council leader Albert Bore to deliver the Big City Plan from grassroots up?