Prime rents for commercial property in Birmingham fell by two per cent in 2010 but are expected to remain stable during 2011 as the supply of Grade A space erodes, new research has found.

According to property experts at Drivers Jonas Deloitte, at the year-end, rents for prime stock in Birmingham ranged from £22 to £27.50 per sq ft, but, on average, were £26 per sq ft.

Yields on prime Grade A city centre offices ended the year at around six per cent but are not expected to change significantly during 2011. Likewise, prime industrial yields, which currently stand at 6.75 per cent, should also remain stable throughout the year.

In the retail sector, despite a fall in rents, yields saw little or no compression during 2010, with yields on prime retail space in Birmingham remaining at 5.25 per cent.

Speaking at Drivers Jonas Deloitte’s annual investment seminar in Birmingham, Edwin Bray, regional head of valuation, said Birmingham is in a good position to attract investors away from London.

“In recent years, much of the cash pouring into the UK from overseas investors has centred on the capital, but with Birmingham presenting good opportunities for potential high yields and with funds and institutions beginning to refocus their attention on regional centres, during 2011 we expect to see more competition for prime investments.