Manchester’s office market returning to health, says King Sturge
NEW research by King Sturge into the European office markets shows signs of recovery following two years of upheaval but key centres are recovering at different speeds.
The firm’s European Office Property Report 2010, published this week, also indicates that overall occupiers are emerging from recession with stronger corporate balance sheets, making it easier for companies to take advantage of the trough in rents and the wide choice of office supply in many centres.
Manchester’s positioning in this report, according to King Sturge’s Offices Partner in the city, Chris Mulcahy, is a healthy one particularly when contrasted with other UK centres such as to Birmingham and Leeds and in particular southern European centres like Madrid where takeup of office space is down 40%.
Prime rents in the city have stabilised at around £28.50 per sq ft and are expected to increase slightly later in the year as the supply of Grade A stock dries up.
“So far in 2010 Manchester has had city centre office takeup of 1.025m sq ft, whilst Birmingham has seen 550,000 sq ft and Leeds only 200,000 sq ft. Manchester in comparison to these cities is performing very well and throughout the recession has been the strongest, further strengthening its case as the second city.
“Initial signs for 2010 for the UK have been most promising although recovery has been patchy. London, which was so hard hit at an earlier stage by recession than many European capitals, is gathering speed and becoming one of the first Euro cities to emerge with the promise that the years between now and 2015 will see 2.6 per cent growth.”
Mulcahy said that the demise of law firm Halliwells led to a round of activity which had a knock-on effect in terms of office requirements, take up and availability.
“In investment terms so far this year, the city has been boosted by greater activity. The first six months of this year saw £249.9 million invested in three transactions, compared to a total of £166 million for the preceding two years.
“Much of this was attributed to Aerium’s acquisition of 3 Hardman Street for £182.5M, the largest ever office investment for the city, advised by King Sturge. This demonstrates investor interest in the city is strong,” he said.
