Banking on Birmingham

What the arrival of this financial giant means for investors in the UK’s most vibrant property market.

 

Over the centuries, an ambitious city in the West Midlands has fuelled the furnace of British might and ingenuity. A home to pioneers who sparked the industrial revolution, craftsmen whose jewellery adorned the necks of aristocracy, blacksmiths whose weaponry laced Queen Victoria’s formidable armies and where titans of all industries earned their fame and fortune.

Formerly dubbed the “Workshop of the World”, Birmingham is once again a city that’s truly going places.

In the modern era, tales of prosperity in the city continue to make headlines. Birmingham has established itself as the number one city region in the UK for foreign direct investment outside the capital, securing 111 projects in 2016 and creating over 6,750 new jobs in the process. The manufacturing, automotive and digital technology sectors have long thrived in and around the city, attracting continued international recognition, but Birmingham is soon to add a prestigious new feather to its cap, with the arrival of banking giant HSBC from London.

 From January 2018, HSBC is set to relocate a thousand employees to Birmingham in order to separate its retail and investment banking operations in the UK. Currently under construction in the Arena Central development, the bank’s impressive 10-storey glass tower reflects the moves of other giants such as Deutsche Bank and RBS who have also developed a presence in this emerging new financial hub. But it’s not only titans of finance who are looking to be part of the city’s increasing worldwide commercial appeal – savvy property investors are also looking at the city as a strong investment opportunity.

 “Investors understand the magnitude of what HSBC’s relocation will do to future property values in the area” says John Treacy, International Sales Director of Seven Capital – a leading developer in Birmingham. “As the financial sector continues to grow and thousands of young professionals migrate towards Birmingham, developments on the doorstep of the banking district are now in high demand”. Indeed, catering to a market significantly undersupplied with residential accommodation, Seven Capital has begun construction of its highly anticipated development “The Quadrant” located just 400m from HSBC’s new headquarters in the heart of the city centre. With Knight Frank recently naming Birmingham in Europe’s Top 10 performing cities for capital growth and PwC labelling it as the number one property investment case in the UK for the past 3 years, it’s little wonder that the UK’s second city is increasingly firmly on many property investors’ radars. 

The Quadrant (pictured above) is within walking distance of HSBC headquarters offering 1 and 2 bedroom apartments ranging from £199,000 and expected rental yields of 6-7%.

As the council’s “Big City Plan” approaches completion, headlines continue to underline just why HSBC took the decision  to relocate, with £6.6 Billion worth of contracts recently awarded for the new HS2 high speed rail line, which will connect London to Birmingham in just 49 minutes.

Ultimately, the global banking giant’s move is  testament to Birmingham’s international standing as a great place to do business in the UK but also a strong sign for investors to capitalise on the buoyancy of the local property market.

For decades, the second city has played second fiddle to the capital but for a host of compelling reasons, it is once again time for Birmingham to shine.


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