Salhia puts Birmingham’s tallest tower back on track

One of Birmingham’s most high-profile development sites is pushing ahead, more than a decade after it was first bought. Kuwaiti developer Salhia has revealed plans for phases II and III of the stalled £200m Beorma Quarter site, which includes Birmingham’s tallest mixed-use tower, and says it could be finished by as early as 2020. The UK representative for Salhia, Keith Williams, says the timing is now right for substantial investment from the group, with HS2, the regeneration of Digbeth Markets and newly announced investment from Hammerson all acting in its favour. If so, it will end a 10-year wait for the 2.3-acre Digbeth landmark, for which Salhia first submitted plans for a 27-storey office tower alongside flats and retail in 2009. The development is not the only one to be brought back to life by Birmingham’s resurgent market and the excitement generated by HS2. At the beginning of this year, Rockspring and Sterling selected BAM as the contractor for their 26-storey office tower on Colmore Row, which is also vying for the title of tallest office tower in Birmingham. Long gestation Like many developments in the city, the Beorma Quarter scheme fell victim to the financial crisis, and it struggled to get off the ground. Since then the site has undergone a number of changes in its planning consent to reach the approved design of 170 flats in the 30-storey tower, 200,000 sq ft of office space, and 15,000 sq ft of retail. Phase I – 26,170 sq ft of mixed-use offices and a hotel – was started in early 2015, and is now largely complete through a combination of refurbishment and new-build around the Cold Store Warehouse on Digbeth High Street, with 20,000 sq ft let to the Prince’s Trust. Williams says he is not surprised the scheme has taken this long. “The building has been refined and made more user friendly, it was done with the full co-operation of the council, who have welcomed this position,” he says. “When you look at the long-term investment Salhia have made in this, which is in substantial support of Birmingham and the region as whole, I am surprised sometimes that people do not take a bit longer than they normally do.” Salhia says phases II and III – the tower and dedicated office building – are soon to get under way, with a £140m build cost. Demolition has already started and while a main contractor has yet to be appointed, various parties are being approached. Salhia says it is seeking prelets of the commercial office space and negotiations are in hand with several interested parties. Long-term focus Abdulaziz Al-Nafisi, deputy chief executive officer of Salhia, says it will supply initial upfront development costs from Kuwait, and will go to the banks and financiers for the remainder of the scheme. “Most of the projects that we do are mixed-use schemes, and Beorma is precisely that,” he says. “It’s a mixed scheme, and we would like to highlight that it’s not just another office tower and we are there for the long term. We buy into the big city plan, and we are proud to be in Birmingham.” Salhia is not a new entrant to the UK. Started in 1974 by a group of Kuwaiti investors before listing in 1984, it started to invest abroad after the first Gulf War. It bought a majority stake in Haddia Holding in Germany, which specialises in retirement and care property, and in the UK entered into a 50/50 joint venture with St Modwen called Key Property Investments, or KPI. Of the 50 or so assets it bought though the acquisition of the Marconi and Austin portfolios, it says the jv still owns half to two thirds and is soon to bring forward the next phase of Farnborough town centre in Hampshire. For the moment, Al-Nafisi says Salhia is concentrating on its existing UK holdings, and not looking for new investment opportunities. “We are currently just focusing around the jv and we are focused on Beorma and delivering that. That’s important for us, and important for our track record,” he says. To send feedback, e-mail alex.peace@egi.co.uk or tweet @egalexpeace or @estatesgazette