Birmingham may have many of the ingredients needed for a celebrity lifestyle, including designer stores, Michelin-starred restaurants and a top-flight orchestra, but until now it has lacked one vital component: prestige city-centre pads. All of that looks set to change, however, as developers behind two rival tower blocks vie to sell the city’s first £1m-plus flat.

The contest is a tough one: the Orion Building’s £1.65m, 25th-floor penthouse has the stamp of fashion designer John Rocha, and proximity to Harvey Nichols in the nearby Mailbox development in its favour; its two rivals, at the top of the 39-storey Beetham Tower and on sale early next year for about £1.5m each, will have the better views.

On a recent visit to the Orion, the scale and view were already impressive, even if the furnishings were not yet in place. The gull-wing roofline creates a triple-height space with floor-to-ceiling windows in the open-plan living area. The best views, however, are from the “weir”, an infinity pool-style bath, that projects out into a bay window, giving a 180-degree glimpse of the city as you soak.

Rocha, who was involved in the design of the boutique Morrison hotel in Dublin, worked on both the penthouse’s layout and furnishings. “It will have an organic feel about it, but in a contemporary space,” he says. “I have tried to create a beautiful space I would want to live in.”

Although the level of demand for £1m-plus dwellings in Birmingham remains to be seen, such landmark developments are certainly injecting excitement into the city-centre market.

Hometrack reports prices as a whole in the centre have risen by about 10% over the past year, but, as Mark Evans, a partner at Knight Frank Birmingham, says, “the iconic buildings have taken the city to new values”.

Take the Cube, a mixed-use scheme designed by Ken Shuttleworth, the architect behind London’s “Gherkin”, and due for completion in 2008. Flats in it cost £446 per sq ft, against an average £285 per sq ft elsewhere in the centre.

Vicki Francis, 51, and her husband David, 53, are downsizing from a four-bed house in Sutton Coldfield to a duplex on the 19th and 20th floors of the Cube. They paid £555,000 off-plan — about double the average price of a new-build flat in the city. “We hope it is going to be something a little bit different and exciting,” says Francis.

Birmingham’s centre is expanding not just upwards but outwards. One of its biggest regeneration projects is the 420-acre Eastside area. Already the site of Millennium Point, a complex including a science museum, it will include Birmingham’s first city-centre park for more than a century. “Exciting things are happening on Eastside,” says Evans. “Over the next five years, it will probably be giving the Mailbox area a run for its money.”

One of the Eastside developments seeking approval is the 574ft Pinnacle building, which will contain Britain’s first indoor “vertical” theme park, with proposed rides including a parachute jump and a saucer-shaped ride that climbs up a spindle in the middle of the tower.

Other areas on the up include the Jewellery Quarter, in the northwest of the city, and the Gun Quarter, in the north, where there are proposals to build 1,000 private homes and accommodation for 2,500 students over the next 10 years.

Cheaper areas such as these may prove to be the best investment. With average prices for new-builds at about £150,000, compared with £250,000 in the centre, there is room for catching up.

“Buy in the city centre and you will get good returns in the medium to long term,” says Richard Donnell, Hometrack’s director of research, “but for quick wins, go cheap and cheerful.”

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