Birmingham Investment Guide CSIPROP2019

INVESTING INTELLIGENTLY TOWARDS 2019/2020

CSIPROP INVESTMENT GUIDE

BIRMINGHAM

Birmingham Birmingham has been through a roller coaster ride. After a consistent period of growth, this highly industrialised city suffered steep economic decline in the 1970s with 200,000 jobs lost, but has since rebuilt itself. Especially in the last few years, the City of A Thousand Trades has been given a shot in the arm, thanks, in part, to its Big City Plan which aims to expand the city core and add £2.1bn to the city’s economy. The Brummie tale is still being written — with the Commonwealth Games in 2022 and the targeted opening of the HS2 in 2026, you need to watch this space.

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Birmingham Key Economic Indicators Greater Birmingham & Solihull

UK 66m 4.2%

Population ONS & Nomis

2,031,300

Unemployment Rate ONS & Nomis

3.3% Average House Price Growth Research Report: Birmingham

Hometrack

Regarded as the world’s first manufacturing hub, Birmingham grew from a medieval market town to the leading nucleus of the Industrial Revolution in Britain. In the last decade, the city made great strides in growth as a result of careful planning and infrastructural development. Central to this is the Big City Plan, an ambitious 20-year city centre masterplan aimed at supporting Birmingham's continuing transformation into a world-class city centre and expanding the city core by 25%.

As the regional capital for the West Midlands and UK’s second most populous metropolis, the city centre accounts for a third of Birmingham’s economic output, accommodates more than 150,000 jobs and attracts more than £2bn of shopping expenditure every year. It is also home to over 30,000 people. The Big City Plan will ensure that Birmingham continues to be the key driver of the region’s economic growth.

5.5% 6.3%

Birmingham

London

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Economic Performance & Talent Attraction Birmingham may well be the most entrepreneurial UK city outside London. As of 2017, it had been the top regional destination for business start-ups for 5 consecutive years. Its capacity for business growth (coupled with more affordable real estate) has attracted a number of businesses from London.

Deutche Bank, for example, opened a major office here with more than 2,000 employees while HSBC relocated its retail and commercial arm from London. Office take-up exceeded 1 million sqft in 2017, 51% above the 10-year average, while the region’s tech and digital sectors are poised for growth.

In terms of economic advancement, the city’s GVA is expected to expand by an average of 2.1% annually from 2018 - 2022, just above regional and national

averages. The Commonwealth Games in 2022 alone is expected to generate around £750m for the local economy.

Despite a slightly lacklustre employment rate, Birmingham is expected to witness employment growth averaging 0.6% annually from 2018 - 2022 — marginally above the 0.4% West Midlands annual average. Assuming similar or increased trajectory bolstered by the HS2 and other infrastructural developments, this could mean an increase of 14,000 jobs by 2025, and the Big City Plan of creating over 50,000 jobs and contributing £2.1bn to the economy each year by 2031, could well be achieved.

Fastest-growing City Centre Populations Thousands

Research Report: Birmingham

0

5

10

15

20

25

30

181% 163%

Liverpool Birmingham Leeds Manchester Bradford Leicester Sheffield Newcastle Milton Keynes Southampton Cardiff Bristol Nottingham Coventry Northampton

146%

149% 139%

94% 88%

10

45

2015 2002

113%

81% 5

150%

40

145%

113%

0

35

85%

81%

78% 15

20

25

30

35

40

45

Thousands

It’s unsurprising that Birmingham is the second most populous city in the UK; data shows that it grew 163% from 2002-2015, faster even than London.

Source: Centre for Cities, BBC.

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Rising Population Numbers Birmingham is one of the fastest-growing populations of the UK, increasing 163% between 2002 and 2015 according to Centre for Cities. Its population now stands at 1.1m, of which 65,000 are students enrolled in the 4 univerisities within its boundaries. Of this number, 49% of graduates choose to remain in Birmingham for work — the 6th highest graduate rentention rate in the UK. Increasingly, Birmingham has become a popular destination for those leaving London. ONS figures confirmed that it is the top destination for Londoners leaving the capital with over 7,000 relocating in 2017, while 2016 saw the arrival of 6,500 people from the capital!

Knight Frank predicts that the nunber of people living in Birmingham will hit 1.3 million by 2039, bringing with it increased demand for new homes.

The HS2, once operational in 2026, will cut travel time to and from London from 1 hour 20 minutes to only 49 minutes. This will boost the local economy while attracting people in the short and long term, further driving population numbers and housing demand

Birmingham: Top Destination for Those Leaving London, 2016

7,000 6,000

3,000

Birmingham is a top choice for those leaving London with 6,500 people relocating from the capital in 2016.

2,000

Source: ONS, UK Migraton Statistics, Knight Frank

1,000

Leicester

Coventry

Nottingham

Luton

Basildon

Leeds

Canterbury

Welwyn Hatfield Slough

Hertsmere

Reigate and Banstead

Manchester

Bristol Elmbridge

Dartford

Epping Forest Meadway

Brighton

Thurrock

0

Research Report: Birmingham

4,000

Birminghaam

Number of People

5,000

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Research Report: Birmingham

Housing Growth Together with the North, the Midlands region, where Birmingham is, saw the strongest growth over the last four years to Sept 2018. Little surprise, then, that PwC’s Emerging Trends in Real Estate report, which looks at future prospects of European cities, placed Birmingham as one of Europe’s top 20 most investable cities, outranking London and Manchester.

Annual & Cumulative Price Growth in Prime Regions, 2014 - 2018 Prime Central London

Other Suburban London

Commuter Zone

Wider South

Midlands/ North

Scotland

Annual growth

-3.8%

-3.1%

-2.8%

-1.6%

-1.2%

2.5%

2.0%

Four-year growth

-18.3%

-7.6%

-3.2%

3.8%

6.9%

6.1%

4.0%

The Midlands and the North led the charge in house price growth over the last four years, both cumulatively and annually.

Source: Savills Research

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With average residential values charting a 31% increase over the last 5 years in Birmingham alone, this city will continue to lead the charge in house price gains in the region.

Spurring price growth is the increasing desirability of the city centre as a place to live for young professionals, especially in the last 2 - 3 years, and the corresponding undersupply of housing development in meeting demand. This has underpinned the lettings market and rental values.

Overall, the outlook for Birmingham’s residential market is positive, with above average but stable growth in rents and prices expected.

2018

2019

2020

2021

2022

House price growth forecast

4%

3%

31/2%

4%

41/2%

Rental growth forecast

3%

21/2%

3%

31/2%

31/2% Research Report: Birmingham

Birmingham Property Growth Forecasts

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Words VIVIENNE PAL

Research VIRATA THAIVASIGAMONY VIVIENNE PAL IAN CHOONG

Design & Layout AHMAD MUNAWAR ABD RAHIM JANE TAN

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This is an overseas investment. As overseas investments carry additional, financial, regulatory and legal risks, investors are advised to do the necessary checks as well as research on the investment beforehand. Investors are also advised to seek independent and qualified legal, financial and tax advisors. Past performance is not necessarily indicative of future performance even if the same strategies are adopted.