City rents hold firm despite credit crunch
NEW research published by commercial property consultants CB Richard Ellis (CBRE) has shows that rents in Manchester have held firm during the second quarter of 2008.
Despite concerns over global economic prospects, demand for premium Grade A office space in the city centre has continued and rents have remained static at £28.50 per sq ft.
John Ogden, director of office agency at CBRE, said: “Although rents have stayed static for the second year running, there has been strong upward pressure and we fully expect rents to push £30.00 per sq ft during the second half of the year.
“Take-up during the first six months of the year reached 342, 265 sq ft, which is slightly below par on last year’s performance and the 10 year average of 805,880 sq ft.”
He added: “However, activity over the run up to Christmas looks set to push take-up to around onemillion sq ft for the year as a number of under offer deals complete and active requirements are satisfied.”
The research also found that the city’s office rental market is alsoolding its own with more than 800,000sq ft due to be completed by the end of the year.
Supply in available and ready to occupy space also seems stable at the end of the second quarter. Although above average at 1.2 million sq ft, it remains well matched against demand after several years of chronic under supply of quality stock and more than 300,000sq ft is already accounted for in pre-lets or under offer.
Mr Ogden added: “Market activity has been dominated by professional services and banking and finance with the largest take-up of the period, 50,000sq ft for the Bank of New York at 3 Hardman Street.
“We anticipate in the order of 350,000sq ft of Grade A office space to be taken in Manchester by the end of the year, and the total take-up is likely to exceed the five-year average of 850,000sq ft.”
