Castlemore has sold its 18,580 sq m (200,000 sq ft) Provident Park site, off junction 4 of the M42, to Stoford and Morley. The site has detailed consent and the new owners are expected to develop three office blocks of 8,360 sq m (90,000 sq ft), 5,575 sq m (60,000 sq ft) and 1,860 sq m (20,000 sq ft).
The letting of Morley and Opus Land's 3,810 sq m (41,000 sq ft) Paradigm office scheme at £199.13/sq m (£18.50/sq ft) is being hailed as a significant deal that will hopefully attract renewed interest in the area as a place to locate. Grenville Smith & Duncan acted for Morley and Opus Land.
Telecoms giant Hutchinson has also decided on the M42, taking the 3,250 sq m (35,000 sq ft) Lakeside Building at Arlington's Birmingham Business Park on a 20-year lease at £209.90/sq m (£19.50/sq ft). Around 100 Hutchison staff will move from serviced offices in Solihull to the new building. Saxon Law acted for Hutchinson.
The M42, which runs through Solihull and out towards Tamworth, has been compared with the Thames Valley because of the number of TMT operators located there. Like the Thames Valley, the M42 has had large chunks of space put back on the market following the slump in the TMT sector.
In February communications firm CMG curtailed expansion plans and put 8,730 sq m (94,000 sq ft) of offices at National Mutual's Trinity Park, next to Birmingham Airport, back onto the market. This move followed September 2001's announcement that Hutchison had pulled out of a deal to take Taylor Woodrow's 6,530 sq m (70,000 sq ft) speculative development at Princes Way in Solihull.
Insignia Richard Ellis director Martin Guest says the M42 has not experienced the drop in activity that was predicted thanks to local company requirements. Guest believes that recent deals will help to draw in some of the 27,900 sq m (300,000 sq ft) requirements in the Midlands.
John Hammond, surveyor with Grenville Smith & Duncan, says many of the landlords were helping to attract occupiers by undertaking refurbishment programmes on space that was dated.
With landlords becoming more flexible with contracts, as well as refurbishing space and creating smaller units, this should help to attract tenants.
Several agents working in the M42 market say that side-agreements have also been helping to shift space. This is when tenants with surplus accommodation on schemes where the landlord is still marketing vacant space agree to rent it out at the same levels as the landlord, but then draw up a separate agreement with the subletting tenants to reimburse them a certain amount.
However, the recent case of Allied Dunbar Assurance Plc v Homebase Limited throws into doubt the legality of such an option. The Court of Appeal found in favour of Allied Dunbar, which took Homebase to court over a side deed.