Manchester’s office rents increase but take-up remains subdued
HEADLINE rents for Grade A office space in Manchester city centre have seen a modest increase to £29 per sq ft – up from £28.50 per sq ft, according to a new survey.
The Drivers Jonas Deloitte quarterly Office Market Review also revealed that incentive periods had stabilised, at 30 months for a ten-year lease.
The firm suggested that that KPMG’s confirmation of its long-awaited decision to take a 65,000 sq ft pre-let at Argent’s 1 St Peter’s Square scheme has helped to reignite the market, despite overall take-up levels standing lower than last year.
It added that more recent news, including Pannone’s confirmation of its intention to relocate by spring 2014, means a future shortage of space remains a likely possibility.
Adam Robson, assistant director from Drivers Jonas Deloitte in Manchester, said: “Whilst take-up levels this year will most likely fall short of last year’s impressive total, the picture is growing more positive following the two big announcements from KPMG and Pannone.
“Large landmark HQ offices are increasingly thin on the ground in Manchester and with more requirements now circling the market, the conditions are increasingly pointing towards an uplift in rents within the next two years.”
Meanwhile, figures from the Manchester Office Agents’ Forum suggest that current take-up levels remain subdued.
Its latest report shows that 156,803 sq ft of space was taken during the third quarter, meaning the yearly total to date is 458,302 sq ft. The take up rate during the same quarter of 2010 was 700,719 sq ft, although this included the 328,000 sq ft Co-operative Group headquarters deal.
The most notable lettings during the past three months include Late Rooms taking a further 11,757 sq ft at Peninsula, Outsourcery agreeing a deal at Spinningfields’ The Avenue for 7,792 sq ft and the 26,699 sq ft sale to the Iraqi Consulate at 1 Norfolk Street.
Alex Russell, associate partner at WHR Property Consultants and spokesman for MOAF, said: “Whilst there has been a slight fall in take-up in the third quarter of this year compared to the previous one, this was not unexpected and is typical of the time of year in any market when the summer months are always quieter.
“However, occupier demand has remained steady with us already seeing a significant increase in new enquiries during September and October.
The market for space in south Manchester showed a significant improvement, with 184,043 sq ft of space taken up during the quarter. This brings the total space taken up in south Manchester for the year to date to 368,086 sq ft.
Russel said that figure “isn’t far behind the city centre and paints a positive outlook for the region.”
