Fund manager M&G real estate has swooped in to back the £200m construction of Birmingham's Three Snowhill, in what will be one of the largest city office schemes to be built outside London.
The 420,000 square feet building, which is being built speculatively by developers Ballymore, is part of a wider 20-year master plan to turn Birmingham Snowhill into a leading business hub, with companies including Barclays and KPMG already on site.
On completion at the end of 2018, Three Snowhill will comprise 385,000 square foot of office space and 35,000 sq ft of retail and leisure, housing around 4,000 workers.
Announcing the deal ahead of the Budget today, chancellor George Osborne said the deal will play an important role in making the Midlands "engine for growth".
“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,” he said.
The deal follows M&G Real Estate’s acquisition of Two Snowhill in 2014 and forms the next stage of Birmingham’s wider Snowhill master plan, which has transformed the northern end of Colmore Row to become the prime location for offices in the city centre.
M&G Real Estate chief executive Alex Jeffrey, 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.”