Europe -  Birmingham

Birmingham suffered as a result of the decline of the manufacturing industry and the rise of new technology in the 1970s and 1980s, but soon recognised the urgent need to diversify its economy and move away from a perceived reliance on this industry. Today, Birmingham is an established UK conference and events market with a full calendar of events, as well as a key regional corporate market. Additionally, a number of financial services and firms in other sectors continue to expand, including the arrival of HSBC’s new UK retail headquarters. The city and wider region has benefitted from a large amount of foreign direct investment from the EU and other private organisations as well as from strategic central-government-backed spending on various schemes, including the redevelopment of Birmingham New Street Station and the new Library of Birmingham.

The city managed to build on its increased exposure through the Rugby World Cup in 2016 and doubled the share of overnight guests in three years to 45%. The increase in visitation is fuelled by the leisure segment, attracted by the growing cultural offer. Birmingham has recently been named as host city for the 2022 Commonwealth Games, the first in England since Manchester in 2002. With a runway extension at the airport in 2014 and the much talked about HS2 project on the horizon, connectivity to the city was and will be further improved having already resulted in an 11% increase in airport passengers in 2017 versus 2016. MICE demand is also strong and the Birmingham NEC, close to the airport, is able to compete with other large UK exhibition centres, thanks to major events such as the Spring Fayre, the Autumn Fayre and the Caravan Show.

This increased volume is also reflected in hotel performance: marketwide occupancy grew by more than 3% to 74% in 2015 and was maintained at around 75% in 2016 and 2017. After three years of steady growth at 7%, average rate grew by 2% in pound sterling terms in 2017.

The city is not a luxury hotel market; however, there is a growing appetite for higher-end hotel accommodation in the city centre. A 168-room Aloft at Eastside Locks and the 78-room Principal Grand Hotel are expected for 2019. Around the airport, a 178-room Hilton Garden Inn is expected for Autumn 2018 as well as a 224-room Moxy Hotel close to the NEC Exhibition Centre, in early 2019. In the city centre, a large proportion of future projects in Birmingham are on hold or speculative (2,500 rooms).

Notable transactions in 2017 included the sale of the 152-room Premier Inn at 1-6 Waterloo Street for €29.7 million/£26.5 million by Cannock Group to Standard Life Investments, and the 174-room Hotel La Tour for €33.5 million/£30 million purchased by Dalata Hotel Group. Several other assets also traded in 2017 on either a single asset or a portfolio basis (Jurys Inn Birmingham, ibis Birmingham Holloway), showing the elevated investor interest in this market.

Change In Value For Market: (€Euro)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Birmingham RevPAR Change (€Euro)

Birmingham RevPAR (€Euro)

For more information, please contact:

Sophie Perret, MRICS, MBA
[email protected]
  • +44 20 7878 7722 (w)
Simon Hulten
[email protected]
  • +44 020 7878-7775 (w)