Manchester’s office rents to rise, says Savills

INCREASED demand for Grade A Stock and a shortage of new buildings in the pipeline is pushing up rentals in Manchester’s city centre office market, according to property consultancy Savills.

The firm’s latest UK office market report showed that the UK’s property market is likely to move into positive territory over the next 12 months. This is largely due to the performance of the London market, where office rents are likely to grow by 14% in the City and by 20% in the West End.

Manchester, Cambridge and the M25 are also set to benefit from growth rates of between 5.3%-6.5%.

Patrick Joynson, director of office agency at Savills Manchester, said: “With one of the lowest vacancy rates across the UK, Manchester saw rents stabilise during 2010 and landlord incentives started to reduce for the first time in five years.

“We expect this to continue throughout 2011 with the reduced grade A stock placing upward pressure on rents for the best space.

“The main question moving forward is where the supply of large new floor plates will come from? The time lag associated with big developments makes it difficult for a market to quickly react to increased demand.

“The public sector austerity will undoubtedly cause some uncertainty in the medium term but those towns and cities dominated by the private sector can expect to see the greatest levels of upward rental pressure.”