M&G Real Estate is funding the construction of Ballymore's Three Snowhill, a 420,000 sq ft office development in Birmingham city centre.

The c'£200m scheme will be the largest ever speculative city centre office scheme built outside London. It is a key development within Birmingham's Snowhill Masterplan.

On completion at the end of 2018, it will comprise 385,000 sq ft of office space and 35,000 sq ft of retail and leisure, housing around 4,000 workers.

George Osborne, Chancellor of the Exchequer, said: "We want to make the Midlands Britain's engine for growth and this landmark announcement will play an important part in that plan.

"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."

The deal follows M&G Real Estate's acquisition of Two Snowhill in 2014 and forms the next stage of Birmingham's wider Snowhill masterplan, which has transformed the northern end of Colmore Row to become the prime location for offices in the city centre.

Alex Jeffrey, Chief Executive, 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."