M&G Real Estate is funding what it says is the largest-ever speculative office development in the UK outside London.

The investment manager will provide capital for developer Ballymore’s £200m (€254m) Three Snowhill project in Birmingham.

The 420,000sqft development is part of Birmingham’s Snow Hill Masterplan, along with Two Snowhill, which was acquired by M&G Real Estate in 2014. The masterplan was launched by the city council to create a new central business district and to generate new jobs.

UK Chancellor George Osborne cited the project as playing “an important part” in the government’s plans to “make the Midlands Britain’s engine for growth”.

He 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.”

Alex Jeffrey, CEO of M&G Real Estate, said: “Demand from both domestic and international businesses to secure high quality office space in Birmingham has significantly increased, and this is set to rise further with planned infrastructure improvements such as HS2’s Phase One confirmed to start in 2017.

“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.”