'Cushion' in city projects; PROPERTY: Developments boost as 'crunch' bites.

Byline: By Jon Griffin

A STRING of major developments on the drawing board in Birmingham could cushion the city against woes facing the commercial property sector.

Roger Collier, a partner in the Birmingham office of DLA Piper, said he was upbeat about the city's prospects and stressed the occupier market was also holding up well.

He was commenting on the international law firm's latest State of the Market real estate survey.

The global report, heavily skewed to the hard-hit American economy, found a record nine out of ten respondents described themselves as "bearish", up from 68 per cent in October 2007, and of these 71 per cent attributed it to the continued fallout from the credit crisis.

The overwhelming majority of industry executives concluded that the markets would not improve in 2009. The majority did not expect them to stabilise until 2010 and 22 per cent thought it would be 2011.

But Mr Collier said Birmingham had a host of high profile developments on its books, some already under way, some nearing final approval, and some with start pledges in place.

These include New Street Station, the new library, the British Land Tower, the V building and a variety of schemes earmarked for Digbeth and Eastside.

Mr Collier said speculative development had been hit but highlighted the various pre-lets on the Snow Hill scheme currently under construction.

Barclays, Wragge and KPMG are all moving to the Ballymore development. "It definitely shows a degree of confidence," said Mr Collier.

"There has been no sign of people shelving projects so far.

Twelve months ago everyone was piling into commercial property as an investment, including those who had never been in the sector before.

"They saw it as a passport to riches. That froth has come off and things are more sensible now.

"The recent tidal wave of unprecedented events on Wall Street, including Lehman Brothers' bankruptcy, the federal government's bailout of AIG, Fannie Mae and Freddie Mac, and Bank of America's purchase of Merrill Lynch, is creating a sea change in the markets."