Banging the drum for the West Midlands

In May, the West Midlands will get an opportunity to vote for its first ever West Midlands Mayor. Time will tell as to how successful this concept will be but I rather hope that turnout is somewhat better than for, say, the West Midlands Police Commissioner.

And there is a big job to be done. Which is why I have just written to each of the mayoral candidates to urge them to “take our region’s message” to London. You may not be surprised to learn that this particular property adviser is urging the successful candidate to encourage more businesses in the south-east to relocate to the Greater Birmingham area.

It would be good for us all.

Attracting companies from London and the south east will boost the West Midlands’ economy, help improve productivity, provide a jobs boost – and stimulate the region’s leisure, entertainment and cultural offer. It should be a high priority for the newly-elected Mayor.

 

The West Midlands faces many challenges but it is the best located region for business with excellent communications to the rest of the UK without the disadvantages of over-crowding, high commercial property rentals and unaffordable housing costs – all symptoms of London.

 

Interestingly, corporate real estate investment in London has declined from a recent peak in 2013 of more than £10b a quarter to around £3b in the third quarter of 2016. There is an opportunity for the West Midlands to take advantage of that decline.

 

Latest statistics reveal that whilst Birmingham has been hit by the post-Brexit referendum result with a decline in investment and number of large deals, there is still a great deal of activity and interest in the region. Businesses in London and the south east are looking for lower cost alternatives that still provide easy access to the capital. Birmingham and the surrounding areas are well placed to take advantage of an outward migration.

 

We must capitalise on the opportunity to become home to more companies and also promote the investment that is already occurring in this region. Despite UK-wide uncertainty, the West Midlands is benefiting from the continued expansion of JLR; the imminent opening of The National College for High Speed Rail – and HS2’s strategic importance in attracting consultants, advisors, manufacturing and technical companies.

However, spending on publicly-funded infrastructure in London per resident is £5,426 compared to £389 in the West Midlands.

In the West Midlands does have some notable successes. Last year, more than 800,000sq.ft of office space was taken up in Birmingham city centre and Edgbaston alone.In Coventry and Warwickshire, both road and rail infrastructure have been improved particularly the A45 and a new railway station in Kenilworth. We have world class universities working with business on research and development programmes. Recent research shows that Coventry and Warwick universities combined have an economic impact of more than £1b a year.

Tata Technologies will shortly move to 60,000sq.ft of offices at Tachbrook and both new build and existing stock have achieved record rentals – but still at significantly lower cost than the south east.

My letter to the candidates coincides with my marking 18 years running Boston Fieldgate – a business I established in 1999. It was the same year that the Euro currency was introduced; a year when the official bank rate stood at 6% – compared to today’s 0.25%  Inflation was then 1.5% p.a – having declined from 18% in 1980 (and an eye-watering 24.2%) in 1975.

And we think we’ve got problems now!

Today, the West Midlands should be capitalising on the potential for inward investment and overseas investment. UK property is highly competitive with Sterling down 12% on the Euro and 20% on the Dollar. Property yields are still good compared to saving rates and our close proximity to the London market should be a positive sign for overseas investors.

So my thinking is that the first Mayor for the West Midlands has a vital role to play in campaigning vigorously for the region. Luring more companies from the south east would be an excellent start to demonstrate his or her commitment.

And meanwhile, we all need to do our bit in encouraging those eligible to vote, to cast their vote on May 4.

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