Rents creep up despite occupancy fall in Manchester office market
PRIME rental levels in Manchester have continued to creep upwards despite the amount of space being let during the first quarter plummeting, according to a new report by Jones Lang LaSalle.
The company’s latest survey on the regional office market states that take-up of space within the first quarter of 2011 fell by almost 29% to 134,700 sq ft, with the most significant letting being The London School of Business & Finance taking 25,100 sq ft at Linley House on Dickinson Street.
“The majority of transactions were for deals of less than 2,500 sq ft, with the average deal size falling from around 5,500 sq ft to just 3,300 sq ft.
Despite this, the lack of Grade A office space coming onto the market actually helped to push up prime rents by 11.8% to £28.50 per sq ft.
Jones Lang LaSalle said that incentives had also stabilised, with a 30-month rent-free period being achievable on a 10-year leasehold.
The firm predicted that capital values and prime yields were likely to remain unchanged over the next 12 months, at £475 per sq ft and 6% respectively.
Just one investment deal took place during the first quarter – Himor Group’s purchase of Ship Canal House for £22.8m – a net initial yield of 6.7%.
