Refurbs best bet for TMT growth, says Savills
THE growth of the technology media and telecoms (TMT) sector in Manchester is expected to create a demand for 140,000 sq ft of office space over the coming decade, according to research by Savills.
In a report prepared for the Piccadilly Partnership, Savills said there were 376 business in the sector in 2008, accounting for 5% of all businesses.
During the recession the number of people employed fell back from 15,000 to 11,600 but a gradual recovery of 1.1% is expected, meaning that by 2021 TMT employment in the city will have risen to 12,900.
In a poll of around 60 firms Savills discovered that most TMT businesses are willing to pay £8-15/sq ft and found a typical five-year lease too restrictive.
Most of them have clustered around the Northern Quarter area because of cheaper rents and proximity to the centre.
But Savills said there is no shortage of cheap space in the city: two million sq ft is available with 300,000 sq ft below £15/sq ft. The problem for many occupiers is finding “medium quality” space at £10-15/sq ft.
The report says new schemes such as The Hive, which may have cost £100-120/sq ft to deliver, cannot be offered at less than £20/sq ft. But there is scope for refurbished buildings.
The report said: “Our view is that there is a demonstrable level of unsatisfied demand for good quality refurbished office space for the TMT sector. This space will bridge the gap between start-up/incubator space and the more mainstream office market, both in terms of quality and price.”
Commenting on the report Rowena Burns, chief executive of Manchester Science Parks, said: “The TMT sector is full of early adopters that want affordable, visually interesting space, which isn’t overplanned or manicured, but provides brilliant connectivity and the buzz which comes from being around like-minded entrepreneurial souls with good ideas and free spirits. There is more of this space around in Manchester than you think.”
