Inward investment the key in 2022

By Will Lewis, founding director of OBI Property

Will Lewis

People who keep a close eye on the take-up of office space might have noticed that Manchester city centre once again topped one million sq ft in 2021.

Good news, right? Particularly in a year where COVID caution understandably led to depressed figures for many other cities and travel to work remained patchy.

And yes, the healthy take up is brilliant. But it only really tells part of the story.

Much of the office take up in any given year is down to churn – businesses already in the city moving locally.

A new dimension at play here is that pre-COVID, this was almost inevitably a move to the same amount of space, or larger. But COVID and the rise of home working acted as an accelerant to those companies operating more flexible working, with fewer desks being used.

Deloitte’s move from Spinningfields, where it occupied 72,000 sq ft, to Noma, where it has 35,000 sq ft with WeWork, was high profile, and while other professional services occupiers have also downsized, it’s a case of “wait and see”- Deloitte’s search is now on for a permanent home.

So why is Manchester riding high? Two headline stats help explain it.

The first is that tech and creative businesses, which often grow rapidly, accounted for 47% of take up.

The second is that inward investment, those companies coming into the city with fresh property requirements, as opposed to “churn,” accounted for 45% of take up.

Inward investment has been a strength for Manchester for some years now, with MIDAS, the city’s inward investment agency doing sterling work with key markets.

Games developer Cloud Imperium’s move from Wilmslow to Manchester Goods Yard was one of the stand out deals agreed in 2021. Headquartered in Los Angeles, the firm employs 400 people in the UK, a number it plans to take beyond 1,000 when it moves to its new 81,000 sq ft home within Enterprise City UK.

Another highlight, Roku, the US’s number one TV streaming platform, is opening its fourth UK office in 115,000 sq ft at Bruntwood SciTech’s No. 1 Circle Square. It is seeking to recruit 50+ engineers over the course of 2022.

Director Alastair McGeoch described Manchester as the perfect fit, being “steeped in engineering history and famed for its cultural impact throughout the world”.

Circle Square

Also moving to Circle Square is Uber-owned software company Autocab, which confirmed in January that it will occupy 20,000 sq ft, accounting for 200 jobs.

Much of Manchester’s momentum is driven by tech, but there are other companies, too. Take Castore, a business born on Merseyside taking the sportswear market by storm – football fans will recognise the logo from Rangers, Aston Villa and others, tennis fans from Andy Murray’s kit.

Castore is now in place at One Central Street, where it is filling the building in a 22,000 sq ft deal, announcing its commitment to adding 300 more jobs in the next two years.

Manchester’s appeal endures. The city’s reputation for fun, music and sport remains attractive to students, leading to a steady supply of graduates, many of whom stay on – Manchester’s “leak to London” volume is among the lowest among UK university cities.

This constant supply of bright young people means companies can recruit here. There’s a raft of intuitive property owners and developers in tune with what companies want, and a supportive public sector.

And as the world opens up further, the investment in Manchester Airport’s redevelopment will cement further its advantage in terms of international links.

Manchester is set for a big 2022.