Rising take-up puts pressure on grade A space

MANCHESTER city centre office take-up leapt by 15.5% year-on-year in the first three months to its highest quarterly level since 2010.

That’s according to the Manchester Office Agents Forum (MOAF) which said grade A office supply is now at an “historic low”.

It recorded lettings of 317,627 sq ft in the first quarter, up from 274,800 sq ft in the same period last year. Compared to the final quarter of 2013, take-up jumped 47% from 215,136 sq ft.

Significant deals during the period were Barclays’ 80,000 sq ft at Carlyle’s 4 Piccadilly Place and Trader Media’s 60,000 sq ft at First Street.

But MOAF stessed that small and medium-sized businesses were responsible for most of the deals – 69 during the period. The market was slower in south Manchester where first quarter take-up was 74,018 sq ft, down from 139,492 sq ft in the previous quarter.

In south Manchester MOAF notes that Q1 2014 take-up stood at 74,018 sq ft and whilst this is down from the 139,492 sq ft recorded in the previous quarter. Salford Quays also had a slow start with around 36,192 sq ft of office transactions, down from the 48,134 sq ft in Q4 2013.

Richard Lowe, associate director at Savills and spokesperson for MOAF, said: “Manchester city centre has experienced an excellent volume of transactions during Q1 2014 and recent lettings to companies such as Trader Media and Barclays Bank continue to erode the limited available Grade A accommodation in the city.  

“With a number of further large Grade A transactions set to complete later this year we expect to see continued rental growth combined with a decrease in rental incentives. It is especially pleasing to see the city attracting new companies and employment opportunities to Manchester in the shape of Trader Media with further anticipated inward investment from firms such as Towergate Insurance and Ford Finance in the coming months.”

MOAF members include CBRE, Canning O’Neill, Colliers International, Cushman & Wakefield, DTZ, Deloitte, Edwards & Co, GVA, Jones Lang LaSalle, Knight Frank, Lambert Smith Hampton, Matthews & Goodman, OBI Property, Savills, TSG Property Consultants and WHR.