M&G to fund €255m office development in Birmingham

M&G Real Estate is investing £200 mln (€255 mln) in the UK’s largest ever speculative city centre office scheme outside London.

Birmingham’s Three Snowhill is a 39,000 m2 development comprising 35,700 m2 of offices and 3,300 m2 of retail and leisure space, housing around 4,000 workers. The scheme is due to be finished in 2018. Around 450 construction jobs will be created during the development of the site by Ireland’s Ballymore Group.

The deal is part of Birmingham’s Snowhill masterplan, which aims to establish the district as the prime location for offices in the city centre, and follows M&G’s acquisition of Two Snowhill 18 months ago for around £140 mln.

Alex Jeffrey, chief executive of M&G Real Estate, said: ‘While occupier demand continues to outstrip supply and push prime rents upwards, Three Snowhill will benefit from low vacancy rates and support our strategy to provide our investors with long-term income-driven growth.’

UK chancellor of the exchequer George Osborne said: ‘Not only will this project initially create hundreds of important construction jobs in Birmingham, the resulting space will play home to businesses with thousands of valuable jobs right in the heart of the Midlands – a vital step in us rebalancing the economy in Britain.’