Manchester leads regional office market
MANCHESTER’S office market will hold firm in 2011, and will remain as the strongest of the major regional centres outside of London, according to property firm GVA.
The agency has just published its Big Nine report assessing the major cities outside London, which states that the city will be at the forefront of an improving city centre office market in 2011 followed by Glasgow, Bristol and Cardiff.
The report also argues that Birmingham and Edinburgh will also continue to improve, but that Liverpool, Leeds and Newcastle will remain subdued in terms of now activity.
Chris Cheap, director at GVA, says: “2010 was a robust year for the Manchester office market with Grade A take up at unprecedented levels thanks to, amongst others, Co-op signing up to their new headquarters building and DWF moving into Spinningfields.
“Whilst the overall figure is encouraging it should be noted that the quantum of transactions is not as high as previous years, suggesting that whilst occupier confidence is returning we have not entered full recovery mode in all sectors of the market.
“The signs are promising for 2011 with evidence of significant ‘pre-let’ activity which will not only aid in replicating last year’s numbers, but also help to deliver much-needed built Grade A stock into the marketplace to meet the latent demand.”
Take-up across the Big Nine in 2010 totalled 6,700,000 sq ft, an improvement of 10% on 2009. More than 1m sq ft of that was in Manchester.
The report states that demand from private sector occupiers is driving demand, but that decisions made by public sector occupiers could have a negative impact on Liverpool and Newcastle.
Simon Reynolds, director and head of offices at GVA in the North West, said: “A decline in supply is underway. 2008/09 saw a sharp increase in space. This was principally a result of development completions, which have all but ceased.
“This will persist in the short term, with take-up continuing to absorb existing supply. That said, not all cities experienced a reduction in supply. Availability increased in Liverpool, Leeds and Newcastle.
“While Grade A availability remains high compared to the end of 2007, we expect it to continue decreasing in the short-term. However, availability in the secondary market will take longer to be absorbed.”
