Property News Two Snowhill deal a major boost for city’s property sector

Two Snowhill

The announcement that Hines and Ballymore Group are to jointly develop Two Snowhill in Birmingham is a major shot in the arm for the city’s commercial property sector and will help alleviate the looming office supply crisis, according to Colliers International.

Craig Satchwell, head of office agency at the firm, who advised Hines on the deal, described it as “a very significant regional transaction for the UK property market”.

“Two Snowhill will be the first significant office development outside London constructed post credit crunch with an element of speculative space,” he added.

“It will come to the market in 2013 when most of the existing new build Grade A space in the city is likely to have been absorbed. This will not only help to boost supply it will also help attract inward investment.”

According to Colliers International’s recent Net Stock Absorption Survey, take-up of office stock in Birmingham is the highest it has been for five years. Total occupancy across central Birmingham rose by 221,825 sq ft during 2010.

Mr Satchwell said: “The recommencement of development at Two Snowhill could not have come too soon. If absorption of office space continues at the five-year average, the city is at risk of having little new Grade A stock to accommodate large requirements by 2013.

“This really is great news for the city.”

Designed by architects Sidell Gibson, Two Snowhill is a 14-storey office building, comprising 305,000 sq ft of office and 9,000 sq ft of retail space. Law firm Wragge & Co LLP is to take 185,000 sq ft at a rent of £33 per sq ft. The remaining space will be developed speculatively.

Balfour Beatty has been appointed as contractors and will commence work on site in May 2011. The premises will be completed in the first quarter of 2013. Two Snowhill is targeting a BREEAM Excellent Rating for sustainability.

Two Snowhill is Hines’ third project currently under construction in the UK and reinforces its commitment to quality development opportunities.  In July 2010 the US-based privately owned real estate firm joined forces with Moorfield to purchase eight buildings at Brindleyplace for circa £200million, the city’s biggest ever office buy.

Debt funding for Two Snowhill is being provided by Deutsche Hypo London Branch. Savills advised Ballymore.