Slow start to 2026 as occupiers hold fire and central supply tightens
Birmingham’s office market has recorded its weakest second quarter since records began, with just eight deals completed in Q2 2026, according to a market review published by property consultancy KWB. The figures, which underline a cautious start to the year for the city’s commercial property sector, show occupiers are increasingly cautious about taking new space.
Take-up across the first half of 2026 totalled 151,277 sq ft across 32 deals, leaving the average transaction size at 4,727 sq ft — down 29% on the 2025 average of 6,648 sq ft. The data points to a clear trend towards smaller lettings and, in many cases, firms choosing to consolidate or extend existing arrangements rather than commit to fresh leases.
The largest transaction in the first half was a significant downsizing move: law firm Eversheds Sutherland agreed a 45,690 sq ft lease at Three Chamberlain Square. That deal completed full occupancy at Paradise, but also reflected a broader pattern of contraction — the firm vacated its previous 80,000 sq ft headquarters at 115 Colmore Row.
"Demand outweighs supply in the prime central location."
The KWB review highlights that the Colmore Business District accounted for 58% of H1 take-up, concentrating activity in a narrow pocket of the city and amplifying availability pressures elsewhere. That imbalance, KWB director Malcolm Jones said, is serving to limit the number of new deals as occupiers compete for prime space.
Shifting preferences and the geography of demand
While the Colmore district remains the focal point for major lettings, there are early signs of occupiers widening their search to CBD-adjacent locations. The report notes three deals at Brindleyplace in the first half of the year, which KWB suggests may indicate growing interest in alternatives as central availability tightens.
- Q2 2026 deals: 8 completed
- H1 2026 take-up: 151,277 sq ft across 32 deals
- Average deal size H1 2026: 4,727 sq ft (down 29% on 2025)
- Largest deal H1: 45,690 sq ft (Eversheds Sutherland at Three Chamberlain Square)
Market context and what it means for the city
Jones attributes the slow start to wider headwinds affecting the property and business environment: economic and political uncertainty, structural downsizing by occupiers, and the persistence of hybrid and flexible working models that have reduced firms’ immediate need for large headquarters. He noted many businesses prefer to extend existing leases rather than commit to new space in the current climate, but he urged occupiers to weigh the long-term opportunities of relocating now, pointing to forthcoming investment and funding aimed at transforming parts of the city.
Recent activity beyond lettings suggests the city centre remains a focus for wider placemaking and investment. Paradise, the mixed-use development, has enjoyed a busy summer with public art returning to the scheme, a move developers and civic leaders hope will bolster the area’s attraction as more than simply an office district.
For occupiers, agents and investors, the message is mixed: tight availability in prime locations is constraining deal numbers, but interest remains and alternative locations such as Brindleyplace are gaining traction. How long occupiers remain cautious will shape whether 2026 becomes another subdued year for office leasing in Birmingham or whether a stronger second half, as seen in 2025, can rebalance the figures.
| Metric | H1 2026 |
|---|---|
| Total take-up | 151,277 sq ft |
| Number of deals | 32 |
| Average deal size | 4,727 sq ft |
| Largest deal | 45,690 sq ft (Eversheds Sutherland) |
