Europe -  Birmingham

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Birmingham’s population has increased by more than 100,000 over the last decade and is currently at 1.1 million. It is considered the ‘youngest’ city in Europe as 46.1% of Birmingham’s residents are estimated to be under 30, owing mainly to the large number of students. Birmingham has become an events-led market, as the variety of theatres, concert halls and venues across the well-located city have helped forge a reputation for culture and the arts. Visitation to Birmingham is driven primarily by the domestic market (almost 70%) and most demand is leisure-oriented (circa 65%). Birmingham has recently been named as host city for the 2022 Commonwealth Games, the first in England since Manchester in 2002. The former £1.3 billion city master plan, initiated in 2007, has recently been revised by the council and replaced in light of the pandemic. Consultation for the new master plan, ‘Our Future City Plan’, was launched in January 2021 and aims at strategising Birmingham’s growth over the next 20 years. With the HS2 project on the horizon (phase one is expected between 2029 and 2033 according to the latest estimates at the end of 2021), connectivity to the city will be further improved. Birmingham Airport handled almost 12.7 million passengers in 2019, an increase of 1.6% on 2018. 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. Owing to COVID-19, however, numerous events were postponed to the second half of 2022.

Hotel occupancy grew from the mid-60s in 2009 to the mid-70s in 2019. Meanwhile, after three years of steady growth above 7.0%, average rate grew by just 2.0% in 2017 (in pound sterling terms), 2.5% in 2018 and contracted by 1.0% in 2019. More recently, in 2020 marketwide RevPAR declined by around 75% over 2019, a downtrend solely instigated by the adversity of the pandemic. In 2021, performance remained below pre-pandemic levels, with RevPAR standing at less than 60% of the 2019 level owing to the lack of international demand and large events.

Birmingham’s pipeline over the next five years is amongst the heaviest in Europe, with 31 projects representing an aggregate 4,250 rooms (28.5% of existing supply). The majority of these developments fall within the upper midscale service class and will be independently operated. Amongst the standout projects is the £700 million redevelopment scheme Paradise Circus, a private-public joint venture with Birmingham City Council, Hermes Investment Management and the Canada Pension Plan Investment Board. The 17-storey hotel building is expected to have 152 guest rooms and to be completed in 2024 as part of phase two of the mixed-use development.

2021 saw the transaction of the 239-room Holiday Inn Express Queensway, the 46-room County Hotel, the 109-room Hampton Jewellery Quarter and the 60-room Best Western Connaught for a total volume of €38.7 million. Our HVI analysis indicates hotel values increased by 7.6% in euro terms (4.0% in pounds sterling) in 2021 compared to 2020. Birmingham’s recovery is expected to be underpinned by the relaxation of travel restrictions in the UK from mid-February 2022, a sizeable domestic demand base and the Commonwealth Games to be hosted by the city during the summer 2022. A possible threat, however, is the substantial pipeline.

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: More than -10%

For more information, please contact:

Sophie Perret, MRICS, MBA

[email protected]
  • +44 20 7878 7722 (w)
Nikola Miljković

[email protected]
  • +44 20 7878-7724 (w)
  • +44 7 593572865 (m)
Mathilde De Bona

[email protected]