Manchester office market booming, says report
MANCHESTER accounted for the largest proportion of office take-up in the third quarter of 2015 with 379,97 sq ft transacted, 28% of the combined total across 10 regional cities outside of London.
The Q3 total for the city represented an increase of 6% over the quarter and was 40% above the five-year quarterly average, according to research by commercial property specialist Knight Frank.
Office take-up across the 10 regional cities amounted to 1.34m sq ft in Q3 2015, 36% less than the previous quarter. Despite the fall, the combined take-up total for year (up to the end of Q3) has now risen to 4.8m sq ft, the highest total for the period for five years.
In the investment market, total volumes across the regional cities increased by 73% during Q3 reaching £1.05bn at quarter end.
The rise in investment during the quarter has meant that total turnover in 2015 (up to the end of Q3) reached £3.1bn. This the highest total for the period since 2007.
Manchester and Birmingham accounted for 49% of total turnover in Q3 with significant transactions completing in both cities during the quarter.
In Manchester, the largest transaction was Deutsche Asset & Wealth Management’s acquisition of 2 St Peter’s Square, from Mosley Street Ventures, for £100m. The building is due for completion in 2016 with Ernst and Young already secured as future tenants.
David Porter, head of Knight Frank’s Manchester office said: “The increase in occupier activity in the regions, particularly Manchester, is good news and very fortuitous for those investors that entered the regional markets first. This continuing trend will give longevity to the growing Manchester market and should kick start further new speculative schemes.
“As leasing markets have strengthened, opportunities in Manchester have become more attractive to investors. With the weight of money targeting markets outside London rising, we expect bidding to become more aggressive and place pressure on pricing.”
