Lack of supply driving office refurbs
STRONG demand for office space in Manchester city centre is creating opportunities for landlords to refresh and refurbish their properties, according to Savills.
The firm says attention to detail and differentiation are vital of landlords are to take advantage of improving real estate conditions in the city centre – office take-up levels in Manchester in the first six months of this year were up 43% on the same period in 2012 at 439,944 sq ft.
Opportunities exist for landlords who have with large floorplate accommodation, Savills says.
James Evans, director in the Manchesterb office said: “We are already aware of the well-publicised lack in grade A supply throughout the Manchester CBD, however little has been made of the subsequent impact of this on grade B stock.
“The grade B supply pool of large floorplate offices has diminished by 30% over the last 18 months and there is now a real opportunity for landlords with space of this nature coming back to the market to augment their investment if the refurbishment is done correctly.”
Savills research shows that the highest rent achieved in Manchester during the first half of 2013 was £30 per sq ft (£322 sq m) and the firm expects rental values to increase in the medium term as supply continues to decrease.
The sectors driving overall office take-up in Manchester are business & consumer services sector and technology, media and telecoms (TMT).
Claire Bailey, associate director for Savills Research, addeds: “The TMT sector is forecast to be the fourth fastest growing segment of Manchester’s economy. This suggests that the city will need to accommodate another 1,300 creative employees over the next decade, which could equate to a requirement for an additional 140,000 sq ft of office space to facilitate this growth.”
