Holistic approach to regeneration needed

Birmingham has undergone a transformation in recent years, evolving into a vibrant and dynamic city, powering the growth of the wider West Midlands along with it - says CHRIS MORRIS, real estate partner at Shoosmiths.

This renaissance has been driven, in part, by a booming residential market and surge in development. These projects have reshaped the city's skyline, while laying the foundation for the next chapter of its progression, based on large-scale regeneration and placemaking.

This is no less evident than the arrival of Berkeley Group’s St Joseph in 2018, which was one of many catalysts for Birmingham’s recent development landscape, with the firm transforming the city’s Gun Quarter and Eastside.

Then there’s the Octagon, which has erupted out of the ground at pace and will be the city’s tallest building at 155m, featuring a mix of uses, including build to rent.

Moda Living, HBD and Vita Group are also bringing ambitious residential-led schemes forward across the city. This reinforces the strength of Birmingham’s living sector, which continues to set new records for the amount of residential development in the pipeline.

The city’s resurgence has not been without its challenges though.

Adversity

2023 was a difficult year for the real estate industry, in the West Midlands and nationally. Persistent inflation and elevated interest rates caused a tightening of the borrowing market – putting pressure on investors, developers, and project viability.

Birmingham has faced additional setbacks, with the City Council battling its own challenges.

The cancellation of the northern leg of HS2 was a blow to the region’s transport connectivity, though efforts to revive the line have been proposed by Greater Manchester Mayor Andy Burnham and West Midlands Mayor Andy Street. All eyes will no doubt be on the outcome of the May metro-mayoral elections and how this could impact plans.

Despite the economic and political headwinds, development activity in the West Midlands has remained resilient. One supporting factor behind this is an increased focus and renewed shift towards partnership working, which Shoosmiths has encountered while advising clients.

While some consolidation is to be expected during difficult operating periods, the partnerships model has the potential to unlock new developments and long-term growth, with developers partnering more and more with local authorities, pension funds and international capital to achieve this.

For example, a joint venture between Aviva Capital Partners and Moda Living is supporting the regeneration of a four-acre site in Digbeth. The plans include 1,000 build to rent apartments, alongside green spaces, roof terraces and public realm.

These partnerships will play a key role in Birmingham, accelerating housing delivery and enabling the development and redevelopment needed to elevate the city to a new level.

New chapter

Having proven itself on the global stage as a residential development and investment hotspot, the next phase of Birmingham’s growth journey must be centred on a holistic approach to regeneration that prioritises well-planned mixed-use schemes that complement the surrounding area.

We’ve witnessed the success of these types of projects at Paradise, for example. The completed first phase of the office and leisure development has attracted global businesses such as PwC, as well as a range of restaurants and bars.

Other stages of the project, including One Centenary Way, are having a similar impact. Arup is relocating 1,000 staff to the building and is to be joined by Goldman Sachs and JLL.

Paradise’s phase two plans for new public realm and a hotel help to demonstrate the power of adopting a holistic approach to regeneration – incorporating residential, commercial and recreational space, while creating vital new jobs, homes and economic growth.

Similar projects are also being progressed across the wider West Midlands region.

Shoosmiths recently acted on the acquisition of Gracechurch shopping centre in Sutton Coldfield. The firm advised SAV Group and BPG on the purchase of the 1m sq ft retail centre and while plans are still being formalised, with the West Midlands Combined Authority also providing its backing, SAV Group and BPG have an ambitious vision for the site spanning new homes, as well as leisure, retail, commercial and other uses.

Returning to the city centre, there is an opportunity to learn from these regeneration projects ahead of progressing key developments such as Smithfield and Curzon Street. It is important that development is considered carefully to not only drive and stimulate economic growth, but also address the shortage of housing, particularly affordable.

Prosperous future

There are other reasons to be positive about the future of the city.

Investment in transport infrastructure, coupled with the Council’s plans to redefine and extend the city-centre, could create new opportunities for development and growth. The ongoing Metro extension, forthcoming Midlands Rail Hub and HS2 line will also enhance connectivity in Birmingham.

The impact of this can already be seen in Digbeth, where we’ve had the announcement of Digbeth Loc Studios, set to be created by Peaky Blinders writer Stephen Knight, and the regeneration of the historic Typhoo Tea factory that is pre-let to the BBC.  

The latest plans from Birmingham City Football Club to create a new stadium does not only come as welcome news to Blues fans, but also symbolises the forward progress the city is making. The proposals for a multi-billion-pound ‘Sports Quarter’ is further evidence of the holistic regeneration and placemaking that will shape Birmingham for years to come.