The research year in the UK begins with a swathe of property predictions events around the country. This gives a travelling speaker such as myself a chance to analyse and see how our major cities are performing.
My first stop was Birmingham. The office market has a relatively high vacancy rate, at least partly a result of obsolescence. Take-up has also admittedly been lower than historic averages, but nevertheless has still been the second highest of any of the ‘Big Six’ regional cities over the past five years. It certainly feels like a city on the up. Having grown up on its outskirts, a visit to me always highlights how much its appearance has improved since the 1980s.
There’s no denying that it’s been a tough few decades for what was once one of the most prosperous and innovative cities in Europe; a place that not only cradled the industrial revolution but was also once hailed as ‘the best governed city in the world’. Until the 1960s wages here were on a par with London and unemployment was virtually zero.
But government controls in that decade were already forcing its once hugely diverse economic base into specialising in the nationalised car industry, while post-war planners erased huge chunks of its Victorian townscape, including buildings by Pugin and Barry. The infamous ‘Brown Ban’ on office development applied here, too, stymying its services sector. This all left Birmingham in poor shape for the challenges and opportunities of the 1980s and 1990s.
Under visionary leaders such as Dick Knowles and Bernard Zissman, the infamous ‘concrete collar’ of ring roads that constrained the city centre began to be dismantled. Brindleyplace, the ICC and Symphony Hall were developed. More recently, the Bullring has transformed the city’s retail offer and removed a much-hated symbol of post-war brutalism, while the new, futuristic library has been lauded nationwide.
The ongoing revitalisation has gained new pace thanks to Sir Albert Bore – who was involved in many of the earlier initiatives – regaining leadership of the council. The underground concrete maze that replaced the grand 19th century New Street Station is being transformed into a spacious, light and attractive landmark, while the dated shopping centre above it will become Grand Central, home to the largest John Lewis outside London. The streets outside will be served by trams.
The Big City Plan outlines other routes to continuing this work, of which the most important is the 1.8m sq ft Paradise Circus redevelopment, which will also provide new pedestrian links to the Jewellery Quarter, one of the country’s most attractive urban villages and a magnet for tech and creative start-ups.
Eastside, which is home to universities, a new urban park, a luxury hotel and a science museum, will provide a similar stimulus on the other side of the city. High Speed Two will arrive here, at Curzon Street station, the world’s oldest surviving piece of monumental railway architecture.
The changes are beginning to pay off. Birmingham has seen a boom in Foreign Direct Investment, with 4,000 jobs created in 2012/13, a 52% increase; it was named ‘FDI Destination of the Future’ at the Global Investment Awards in Shanghai. Deutsche Bank is the most obvious recent example; it decided last year to take a further 135,000 sq ft at Brindleyplace. Its website states that the city is now “home to one of our largest sales and trading floors in Europe [providing] sales, trading, and structuring to a pan-European client base,” adding that London is not the only place to have a career in investment banking.
There are also clusters of tech start-ups in areas such as Digbeth and the Jewellery Quarter, which offer a variety of Georgian and Victorian industrial buildings and warehouses perfectly suited to hipster businesses. The TMT base is one of the largest in the regions, with 21% of the country’s computer games employees working here, and the BBC due to create a digital hub. Meanwhile, the city boasts a remarkable dining scene, with four Michelin starred restaurants, the most of any English city outside London, as well as a burgeoning midmarket offering. None of this is yet reflected in economic forecasts for Birmingham’s economy, which are based on the longer-term trends of a declining industrial base. There are signs that this may be being reversed, not least Jaguar Land Rover’s vast investments in the wider region.
Recent research from Centre for Cities showed that Birmingham created more private sector jobs than any other English city outside London between 2010 and 2012. The city centre has played a particularly strong role in this, something that has not always been apparent in local authority level figures. Forecasts cannot anticipate changes in economic direction such as these. The city’s improving image will continue to attract talented young workers, as long as it gets its marketing right. It has low house prices, despite being relatively close to London, and inner suburbs that are more spacious and leafy than in comparable cities.
In my view the revitalised city centre will be better placed to attract the knowledge-intensive jobs and workers that will key to UK plc over the coming years. This may be more apparent by next year’s predictions event.
In his next blog, Jon will look at Bristol.