The Chamberlain News

Birmingham’s towering ambitions to match Frankfurt and Zurich as financial centre

Birmingham does not yet trip off the tongue as an instantly recognisable European financial centre alongside Frankfurt and Zurich, but 20 years of determined efforts to transform the city centre landscape with towering Grade A offices is beginning to deliver a new image, writes Paul Dale.

Sir Albert Bore, the Labour city council leader does not have much in common with his Tory predecessor Mike Whitby, but one area where both men are in agreement is the importance of burnishing Birmingham’s credentials as a hot spot for the business, financial and professional services sector.

And both believe sleek skyscrapers can transform the city centre skyline and send a message to the rest of the world about Birmingham being a city synonymous with big business and wealth creation.

Lord Whitby and his strategic director for regeneration Clive Dutton found it difficult to persuade the planning committee that the economic benefits flowing from an explosion of tall office space should sometimes overrule aesthetic concerns, not least in the case of the 35 storey British Land Tower off Colmore Row which eventually received planning approval despite opposition from conservationists.

The V Building at Arena Central off Broad Street was to have been 50 storeys high, but like the British Land Tower is yet to get off the ground. In 2008, Mr Dutton spoke of Birmingham “laying down the gauntlet” by building skyscrapers and “becoming a force to be reckoned with”.

Seven years and a tough recession later, Sir Albert Bore is proclaiming record investment in office space with £630 million of deals last year compared to just £70.5 million in 2013 – an increase of almost 800 per cent.

He wants to turn Snow Hill and the Colmore business district into a new Canary Wharf which he says will ease the burden on the capital as a financial centre by encouraging London-based firms to expand into Birmingham – as Deutsche Bank did last year.

This approach infuriates Labour council leadership challenger John Clancy and his supporters who believe too much investment is focused on the city centre at the expense of poorer inner city wards and the outer suburbs. But Clancy failed to become leader of the council and will have to watch from the side as the boom in the professional services sector appears to go from strength to strength.

Clancy said he was “unimpressed” by the growth of the business and professional services sector.

He added:

I’ve no problem with building on this city’s long and successful history in financial services, utility banking and commerce. Let’s invest in that.

But to base the future economic development, construction, infrastructure and regeneration of the city upon it? That is unambitious, one-dimensional and concentrates the idea of a city on its centre.

We need to re-imagine and re-think the city in terms of its entirety. We need a 40 ward business investment strategy, not one focused on big commerce in the city centre.”

Sir Albert reckons the conditions are right to promote Birmingham as a city on the up and, crucially, a place where businesses can afford to relocate and still remain close to London – a mere 40 minutes or so when HS2 is up and running from 2026.

Birmingham was recently named the most investable city in the UK by international real estate experts PwC, with the largest range of commercial property investment opportunities available anywhere in Britain and the most affordable Grade A office space of any major British city. Operational costs are up to 55 per cent cheaper than London.

Work is due to start on the 400,000 sq ft Three Snowhill building – which will offer new Grade A office, retail and leisure space – while the first phase of Paradise, the £500 million regeneration project located nearby, will see 330,000 sq ft of speculative office space delivered in 2018.

Marketing Birmingham, the council’s inward investment agency, is talking about record demand from financial services firms flocking to the city and says the skyline will be transformed, with over one million square feet of office construction planned to be completed from 2017.

Sir Albert, echoing the language often used by Lord Whitby, wants to turn Birmingham into a “global city” within 20 years:

We’re investing on an unprecedented scale to entice businesses here, and the sheer scale of planned development is attracting financial firms from across the world. Birmingham is competing with international financial services hubs like Zurich and Frankfurt as it bids to bring even more global businesses to the city.

In the vanguard of change are firms like HSBC which is moving its ring-fenced banking operation to the Arena Central site in 2018.

Young professionals are also flocking to Birmingham, with 5,480 Londoners in their thirties moving here last year alone – the highest of any regional city. Greater Birmingham is also attracting more foreign investment than any other region.

Greater Birmingham is already the largest regional financial and professional services hub in the UK, employing nearly 220,000 people in over 21,000 companies, and bringing £15 billion into the region.

Marketing Birmingham chief executive Neil Rami commented:

Birmingham has worked incredibly hard to transform itself into a prime destination for financial and professional services firms. Those firms demand and need world-class office space, and the city is providing that on an unprecedented scale.

We have affordable and smart Grade A office space here, in a city that will be at the heart of HS2 and has invested record amounts improving its transport infrastructure. The private sector here is rising faster than any other part of Britain, and that is also a big draw for financial firms.

We are consistently creating more start-ups than any other regional city, and Birmingham is rapidly being transformed into a global hub for enterprise and innovation.

Ahmed Farooq, Managing Director of General Insurance at Wesleyan, formally took over as the new chair of BPS Birmingham today. The body represents, promotes and connects the business, professional and financial services sector in Greater Birmingham. He has succeeded Alex Bishop of Shoosmiths. Mr Farooq said:

I am honoured to be following in Alex’s distinguished footsteps. She has done an incredible job of leading the organisation through significant change, with BPS Birmingham on a solid financial footing and once again recognised by its members and the city at large as the voice of the sector.

My job, with the Board, is to build on those foundations, continue to grow our membership and take advantage of the wave of opportunities coming our way, including HS2, devolution for the city region, city developments including Snow Hill/Colmore and Paradise as well as increasing investment and job growth, not least with the forthcoming arrival of HSBC’s UK bank.