Strong start to the year for Manchester office market

New Bailey

Agents are already predicting Manchester’s office market take-up will top 1m sq ft for the sixth consecutive year after a strong start to 2019.

The first quarter has seen 61 city centre transactions, amounting to 314,733 sq ft of space, let according to latest figures from the Manchester Office Agents Forum.

Although 26% down on the same period in 2018, last year’s figure was boosted significantly by the large 157,000 sq ft pre-let deal to HMRC at Three New Bailey, therefore this first quarter reflects a very positive start to what is consistently a steady period of activity at the beginning of the calendar year.

The largest deal was the 47,465 sq ft pre-let of 2 New Bailey to Eversheds Sutherland, with the English Cities Fund office currently under construction and another large pre-let for the city centre market.

In total, there were 61 transactions completed in Q1 – other notable deals included co-working company Huckletree taking a 25,800 sq ft pre-let at the Express Building in what is its first Manchester operation, Knights Professional Services taking 16,272 sq ft at Two St Peter’s Square, and completing on 22,684 at No.1 Spinningfields at £35 per sq ft – a new headline rent for the city centre.

Matt Pickersgill, senior surveyor within the LSH office advisory team at Lambert Smith Hampton, said: “The pre-letting of 2 New Bailey continued the trend from 2018 and reflects the ongoing demand for Grade A new build options within the city centre.

“There remains a good level of unsatisfied requirements which are matched by a healthy pipeline of high quality refurbishments and new-build opportunities, we therefore expect the city centre office market to remain resilient, given the backdrop of uncertainty, and reach 1m sq ft-plus for a sixth consecutive year.”

The positive start was echoed in the South Manchester office market with take up reaching 138,774 sq ft, just slightly down on Q4 2018’s total of 147,614 sq ft.

There were lettings of 33,591 sq ft to Smart DCC at Concord Business Park, and 18,708 sq ft to Landis & Gyr at Trident Business Park.

Salford Quays and Old Trafford got off to a relatively slow start with take up reaching 54,368 sq ft in Q1, down on Q4 2018’s total of 78,489 sq ft.

The largest letting was 11,364 sq ft to Capgemini at Venus, Trafford Quays.

Mark Bamber, partner at Knight Frank, said: “Take up in the out-of-town market has remained relatively buoyant in the first months of 2019, led by the continued increased demand around Manchester Airport.

“We expect this level of demand to continue for the remainder of the year with further significant lettings in the pipeline.

“The continued occupier demand we already know is in the pipeline, coupled with the supply chain of both new-build Grade A offices, and, as importantly, refurbished Grade A accommodation, should mean another strong year with Manchester remaining a destination of choice for both occupiers and developers.”