Lookers to drive new wave of deals in south Manchester

MANCHESTER-based car dealership network Lookers has shortlisted three sites close to the M60 in south Manchester as potential new locations for its 20,000 sq ft headquarters.

The firm, which is being advised by Rapleys, is understood to be looking for 20,000 sq ft of office space as it expands from its current base on Chester Road.

It has highlighted the One Didsbury Point on Princess Parkway, The Royals office building at Sharston in south Manchester and Dovecote Business Park in Sale as likely locations.

The proposed letting would be one of a number reasonably-sized transactions expected to complete in south Manchester during the third quarter of 2011, with 30,000 sq ft also said to be under offer at Atlas Business Park in Wythenshawe.

Adam Jackson, a senior surveyor at Lambert Smith Hampton, said that most of the major south Manchester business parks and major standalone buildings have enjoyed enquiries in recent months and that several of these were likely to turn into deals during the third quarter of 2011.

Lambert Smith Hampton has just published its Office Market Pulse for Greater Manchester which showed that take-up in the south Manchester office market increased by 38% during the second quarter.

He said that it “may just be coincidence” that several larger deals seem to be in the process of completing at the same time in south Manchester, but added that it was a welcome development to see major enquiries returning to a market that has been relatively quiet over the past couple of years.

“Life is better in Q2 than in Q1 and we’re optimistic about Q3,” he said.

A recent increase in refurbished stock in south Manchester has taken the total amount of out of town space available within south Manchester to more than 1.85m sq ft, of which around 400,000 sq ft is Grade A.

Headline rents for Grade A space remain unchanged at £28.50 per sq ft in Manchester City Centre and £18.50 out-of-town, according to LSH, but Jackson said that incentives are tightening.

“The dynamic is changing as the amount of quality stock is reducing,” he said. “Incentives are still being offered but they are that little bit tighter.”

Drivers Jonas Deloitte said that average incentive periods for city centre Grade A stock were around 30 months on a ten-year lease at £28.50 per sq ft.

Assistant director Adam Robson said: “The lack of growth in the Grade A rental market is proof that Manchester needs the economy to recover further before we see Grade A space at a premium once more.

“However, in an economy that is still by no means out of the danger zone, the fact that the office market is showing signs of stability is in itself positive news.

“Companies from outside Manchester such as Aegis are stating their intent to create a base here.

“However, the lack of pipeline development  means that just one or two significant deals – such as the rumoured influx of two professional services firms to Spinningfields – could quickly lead to a drought in space which in turn would cause rents to rise.”